Andrew Miller: May I congratulate staff in the Jobcentre Plus in Ellesmere Port and in Neston, particularly the regional manager, Mr. Mark Wilson, who has done a magnificent job in dealing with the process of change and getting more people back to work in my constituency, with great success? Now that we have a much smaller number of unemployed people, with a core group, some of whom are very difficult to place, will my hon. Friend ensure that the regional structures have sufficient flexibility to allow regional managers to plan to meet the needs of local communities, rather than a one-size-fits-all solution?

Michael Penning: Does the Secretary of State agree that, one of the reasons that the compensation has been paid, after five years, to the 140,000 pensioners who had their pensions stolen was the work of Ros Altmann, who campaigned for five years with, in my constituency, the teams of former Dexion workers led by Peter and Jackie Humphrey? Without five years of action, the compensation that the pensioners deserve would not have happened. Will the right hon. Gentleman join me in congratulating Ros Altmann and others?

Caroline Flint: I thank my hon. Friend for her question. The number of lone parents who claim in her constituency has fallen by 39 per cent. since 1997 compared with a national drop of 25 per cent. I therefore give due credit to those who work on the matter locally for her constituents.
	Our plans for our next steps are to roll out nationally the in-work credit from April. We are considering the way in which we extend the right to flexible working for parents of older children. The human resource director of Sainsbury's, Imelda Walsh, has undertaken that review. We are also considering much more closely earlier skills assessment of lone parents—when they come on to income support—regardless of whether they receive jobseeker's allowance or income support. The vacuum in their skills and basic education often inhibits lone parents. Again, we are providing support on several different fronts, but, as I said earlier, from next autumn parents whose youngest child is 12 will be expected to move on to jobseeker's allowance. That is right because it is a something for something approach to our welfare system and the right mixture of rights and responsibilities.

James Plaskitt: I understand my hon. Friend's deep concern., but there is a problem with capping the rates, which might have adverse effects on the availability of affordable credit. I think that our best response to the need to release people from the burden of interest rates at such levels—or, indeed, even higher levels in the case of illegal doorstep lending—is to pursue the policies that we have, financed through the growth fund, to make much more affordable credit available through credit unions and other not-for-profit financial lenders.
	As my hon. Friend will know, we have already made a significant investment, and there will be further investment over the next spending round. As a result, tens of thousands of people are gaining access to affordable credit, thus avoiding the problems to which he has rightly drawn attention.

David Miliband: With permission, Mr Speaker, I shall make a statement about recent developments in Pakistan and Kenya. I am grateful to you for allowing me to combine the two statements. Both countries are important to Britain, and rightly important to many hon. Members. I know that the Foreign Affairs Committee visited Pakistan in November 2006, and that it was a key focus of the Committee's report on foreign policy aspects of the war on terror in July 2006 and its subsequent report on South Asia in May 2007. I think I am right in saying that several hon. Members are now returning from Pakistan, having gone there to observe the elections that were planned for next week, and will now try to rearrange their visit.
	The situations in Pakistan and Kenya are very different, and I shall deal with them separately, but important elements are common to the recent crises that have afflicted both those regional powers. Both countries have experienced strong economic growth in recent years and the middle class is growing, but poverty is widespread and rising inequality is causing frustration and disillusionment. Both countries face violence and terrorism, and both are undergoing political transition. They are working to embed democratic systems and structures, but struggling to overcome the tribal or dynastic allegiances which have fed personality politics.
	In these circumstances, there is a temptation to turn away. However, there are 800,000 British people of Pakistani origin; there are an estimated 13,000 British citizens resident in Kenya, and over a quarter of a million British tourists visiting each year; the United Kingdom is Kenya's largest foreign investor, and our bilateral trade with Pakistan is worth some £1 billion; and, of course, both Pakistan and Kenya are key partners in the fight against al-Qaeda. That is why the Government are committed to using all their assets to help those countries on the path to peaceful and prosperous development.
	I will begin with Pakistan. I am sure the whole House will want to join me in reiterating our condolences to the family of Mrs. Bhutto at this terrible time and to the other bereaved Pakistani families who are grieving for loved ones who were killed or who suffered injuries in the senseless attack of 27 December. There is cross-party condemnation in this House of terrorism and a determination to stand with the people of Pakistan against the power of the bomb and the bullet, and I welcome that.
	Whatever the disputes about her periods in office, Benazir Bhutto showed in her words and actions a deep commitment to her country. She knew the risks of her return to campaign for election but was convinced that her country needed her. The target of her assassins is all those committed to democracy in Pakistan and it is vital that they do not succeed. The courage shown by Mrs. Bhutto is now required of others as they take forward the drive for democracy and modernisation.
	The Government's aims and role are fourfold. The first priority is to ensure that the circumstances of Mrs Bhutto's death are properly established. A five-member UK police team arrived in Pakistan at the end of last week and has begun work in support of Pakistani colleagues.
	The second priority is to promote free and fair elections. The delay in the elections as a result of the assassination is regrettable but the period between now and 18 February needs to be used to build confidence in the democratic process. When I spoke to the House on 7 November, I made clear my conviction that democracy and the rule of law were allies of stability and development in Pakistan. Since then, President Musharraf has retired from the military. He has lifted the state of emergency. Almost all political prisoners have been released and most media restrictions have been rescinded. But more needs to be done, and we have continued to stress the Pakistani Government's responsibility to create a level playing field under which credible and transparent elections can take place. This means that all remaining political detainees need to be released and the remaining restrictions on the media must be lifted.
	In my last telephone call with Mrs. Bhutto on 9 December, I pledged that the UK would work on the details of the election process. In recent days, the Prime Minister has discussed the elections on three separate occasions with President Musharraf. I have also spoken to interim Pakistani Foreign Minister ul-Haque. We continue to call on the Government of Pakistan to improve the prospects for credible elections, particularly by increasing transparency, both now and on election day itself. This includes setting out clearly and early where all of the approximately 54,000 polling stations will be, posting the results for each station publicly immediately after the count and ensuring that the media's ability to report is untrammelled.
	I am glad that the EU is now working to put together a full-scale election observation mission. I understand that the American International Republican Institute mission may also be reinstated. I believe that the Commonwealth can make an important, positive contribution and I hope that Pakistan will decide to invite an observer mission.
	Our third priority is further to improve counter-terrorism co-operation. The deadly attack on Benazir Bhutto shows terrorism to be a threat to Pakistan, not just to the west. Over the last year, hundreds of innocent civilians have been killed in shootings and suicide bomb attacks in that country. We have reiterated the UK Government's commitment to build on the already significant counter-terrorism support that we provide to Pakistan. A team of cross-Government UK experts will travel to Pakistan next week for further consultations. This will be a precursor to a further British visit to deepen our counter-terrorism relationship.
	Fourthly, we are determined to ensure that British citizens of Pakistani heritage and Pakistanis resident in the United Kingdom are informed about developments and engaged in the drive to build a decent society in Pakistan. I met some of their community leaders earlier today. While the next five weeks are important, so are the next five years and beyond, and economic, social and political development in Pakistan need to proceed hand in hand, with international support.
	Kenya provided the second crisis of the new year break. When President Kibaki won the presidency in 2002, it was hailed as the most free and fair election Kenya had seen. Daniel Arap Moi's party accepted the result and ceded power. Tribal and ethnic divisions were overcome as the population rallied behind the new Government. It was a moment of great optimism. It is a marked contrast with the situation that has unfolded since the election on 27 December. I know I speak for the entire House in condemning the appalling post-election violence in Kenya, particularly the brutal killing of Kikuyu women and children in the church near Eldoret on 1 January.
	Let me deal with the three issues that have preoccupied the Government and indeed the whole international community over the last week: violence and the resulting humanitarian crisis; the elections; and mediation. I have arranged for the nine statements put out by myself, the Prime Minister and the Secretary of State for International Development over the last week to be deposited in a single file in the Library.
	I have spoken to our high commissioner in the last hour and I can confirm that his view is that of the media reports: that the urban violence of the middle of last week has subsided. That is obviously welcome, but the reporting from rural areas suggests that there are up to 250,000 refugees, and there is the potential for violence to erupt again. That is why since 2 January our travel advice, along with other countries', has advised against non-essential travel to Kenya. That advice will remain in place until the security and political situation is clarified. We are advising Britons in Kenya to exercise extreme caution, to remain indoors in the affected areas, and to seek local advice, from the tour operators or local authorities, if they need to travel.
	The humanitarian crisis we have seen unfolding on our television screens is due entirely to the post-election violence. The UN, World Food Programme and Red Cross are leading the international effort. The Department for International Development is monitoring the situation closely and has had a team on the ground in western Kenya. A £1 million contribution to the Red Cross was announced by my right hon. Friend the Secretary of State for International Development last week, and it has helped to provide shelter for those displaced and to facilitate major food shipments from Mombasa, which took place over the weekend. DFID stands ready to provide more assistance if it is needed.
	In respect of the election itself, millions of Kenyans queued for hours, peacefully and with dignity, to cast their votes for parliamentary and presidential candidates after a relatively calm election campaign. It is vital not just for Kenya, but for the whole of Africa with important elections over the next 18 months, that the democratic process works and is seen to work. However, the counting of votes in the presidential election, and particularly the reporting of votes from local to regional and then national centres, has, according to reliable European Union observation, been plagued by irregularity. Those irregularities stand in the way of the formation of a stable Kenyan Government who would have the confidence of their own people and the international community. All allegations of fraud need to be investigated and the perpetrators brought to justice. That requires due legal process, but there is also a need for political mediation. While individual acts of fraud are reprehensible, there is a deeper issue. Whatever the actual result, the country was deeply split. Yet when Kenya needs the diversity of its views to be respected, the presidential system is designed to concentrate power when Kenya's immediate and medium-term future requires the sharing of power.
	Kenya's political leaders must be willing to make the necessary compromises to find a way forward. They are more likely to do so with external help. That is why at the heart of all our conversations—with Kenyan, African, EU, Commonwealth, US and UN partners—has been the need for a credible mediation process. I am pleased that President Kufuor of Ghana, the current chairman of the African Union, is due to arrive in Kenya soon, and he will do so with our full support. He needs Kenyan leaders ready to engage. On 2 January Condoleezza Rice and I called for a "spirit of compromise" from those leaders. If they fail to compromise, they will forfeit the confidence, good will and support of their own people and the international community. The stakes are high for the Kenyan people, and we will remain fully engaged on the political and consular track.
	May I conclude by thanking staff in the Foreign Office and the Department for International Development, in-country and in London, for their outstanding consular and political work around the clock in the very trying circumstances of the last 10 days? Their work is far from done, but both countries are better off for their engagement, and they deserve the thanks of the House.

David Miliband: I am grateful to the right hon. Gentleman for the content and tone of his remarks. We wholeheartedly support his identification of the need in both Kenya and Pakistan for democratic institutions that are not just those of formal democracy, but which are supported through the judiciary, the media and political parties—never mind education, health and other systems.
	The right hon. Gentleman asked about aid, and I am sure that he will recognise that, importantly, the aid and security questions are two sides of the same coin. Yesterday, the food convoy from Mombasa did get through to western Kenya without alarm or difficulty. That is obviously encouraging, but we will follow the situation very carefully. The ongoing assessment to which he referred is made partly by our staff or by DFID staff on the ground, working closely with the high commission in Nairobi. I am happy to keep the House informed on that basis.
	The right hon. Gentleman asked about the nature of the power-sharing arrangements that could come into play. A balance needs to be struck, because it is for the Kenyans to decide the nature of their power sharing, not for us to prescribe a particular type of coalition Government or constitutional arrangement. He reiterated the word that I use, "compromise". It relates to compromise between the two main political parties, and it is important to stress that clearly. Of course, Kenya has a history of so-called "Governments of national unity". It had such a Government in 2002, which did not lead to the sort of power sharing that is needed. I hope that he will understand my saying that at this stage we do not want to prescribe a particular type of constitutional or other reform, but we will all know it when we see it: when a Government reflects the divided will of the Kenyan people in respect of the political parties for which they voted.
	The head of the EU mission has returned to Brussels, but the deputy head has rightly stayed in-country, so that he can brief President Kufuor and others as they come through. I shall find out for the right hon. Gentleman the formal timing of the write-up from the head of the EU mission, but it will, in part, want to reflect the ongoing investigations that are under way.
	The right hon. Gentleman is right to say that there are significant obstacles to a full-scale recount. Some people have called for a rerun of the elections, others for a recount or re-tally, and I was careful to refer in my statement to the problems that existed beyond the individual ballot stations as the results were referred onwards. What is important is that any allegations of irregularities are properly followed through—it would be wrong to sweep them under the carpet. I know that that is not what he was suggesting, but the first priority was to stop the violence.
	The second priority is to get some sort of political mediation under way. The investigation of the irregularities and the possibility of a further future election obviously will be discussed by the parties. I am happy to confirm to the right hon. Gentleman that the £50 million that we are spending through DFID for the benefit of the Kenyan people, which will be spent on bed nets and other essential development assets, will not be harmed as a result of this process.
	In light of the forthcoming debut of the Liberal Democrats' new foreign affairs spokesman, the hon. Member for Kingston and Surbiton (Mr. Davey), perhaps I shall not condemn him until he condemns us, and then we can return —[Interruption.] He says that I will not be disappointed, so I shall save my best volleys until later.
	On Pakistan, I was told as I left the office today that there had been agreement on the terms of reference of the Scotland Yard mission to support the Pakistani authorities, and I would certainly like them to be published. Secondly, in respect of the UK funding, which was to support democratic processes, they are as important as ever, and while we keep that funding under review, no decision has been taken to terminate it.
	In respect of Afghanistan, I have heard the media reports that were mentioned. The right hon. Member for Richmond, Yorks (Mr. Hague) asked for our latest assessment. Our latest assessment on the situation in the federally administered areas is not a new one—it is that the lack of political integration between the federally administered areas in Pakistan and the rest of the country is a threat to the integrity and stability of not only Pakistan, but Afghanistan. I have received no reports of it being an immediate threat to our troops, but the sort of instability to which he refers provides a haven for some of those who are attacking our troops and is a real concern for us. I discussed it when I was in Helmand, and I guess that he and his colleagues have discussed it with people there too.
	The right hon. Gentleman rightly raised the issue of corruption. He will know that none of the money in our bilateral aid is put through the Kenyan Government. We put the money through non-governmental organisations and other organisations precisely to ensure that it reaches the targets for which it is intended. Good government is an essential part of the sort of democratic process in which he and I believe, and it is certainly something that we are working to achieve.

Hugh Bayley: Kenya needs democracy, not a political fix, because democracy is the way to make leaders accountable to the people. Does the Foreign Secretary share my concern about the statement from the chair of the Electoral Commission of Kenya that his announcement of President Kibaki's win was made under duress? Will the Government continue to fund work to strengthen political institutions and parties in Kenya in order to reinforce their commitment to democracy and the rule of law, and their ability to resist anti-democratic pressures wherever they may come from?

Edward Davey: I thank the Foreign Secretary for his statement and associate these Benches with both his tribute to Benazir Bhutto and his sadness at the violent deaths of so many others in the recent crises in Pakistan and Kenya. Benazir Bhutto was a politician of great courage. She put her life on the line for the restoration of democracy in Pakistan and her death presents the world with the nightmare of an unstable, divided Pakistan.
	The Foreign Secretary has described well why we should all be alarmed at recent events in those two countries and the urgent need to restore law and order through democratic means. I pay tribute to his efforts and those of the Prime Minister and many British diplomats in these difficult and often frustrating days. May I say how strongly we agree with much of what the Foreign Secretary has said today—for example, about the decision to send Scotland Yard detectives to assist the investigation into Miss Bhutto's murder and the humanitarian aid through the Red Cross for parts of Kenya cut off by the violence?
	None the less, there remain some serious questions about the judgments made by Britain, the United States and the wider international community, not just in response to these events but well before. On Pakistan, why have the British Government failed to be more critical of the Musharraf regime and its deeply damaging actions, most recently in its attacks on the independence of the judiciary, which the Foreign Secretary failed to mention in his statement? Is it not the case that Britain has been totally complicit with the US policy of bolstering President Musharraf over the years? Does not this crisis show how mistaken that policy has been, with extremism having spread and democratic institutions having been so undermined?
	I am sure that the Foreign Secretary will at least agree that democracy is now the way forward, and we welcome the announcement of a new and early timetable for elections. It is clearly essential that Pakistan enjoys elections that are free and as fair as possible in a political climate that is as stable as possible. So can he tell the House what extra support Britain is prepared to offer to the election monitoring mission from the EU? While it is good that the EU is sending 50 so-called long-term observers for the new elections, does he believe that the increase of just seven on the monitoring mission for the 2002 elections is really sufficient, given the heightened tension and especially given that the Commonwealth election monitoring operation was suspended in November and has yet to be invited back to Pakistan? Is there not a danger that the February elections will have less international scrutiny than the flawed 2002 elections? Given the crucial role of the judiciary in supervising elections matters, what representations are being made to President Musharraf to insist that he reverses his recent dismissal of critical judges and ends the intimidation of the entire legal profession?
	On Kenya, may I thank the Government in their various public statements for not referring to Mr. Kibaki as the new President? Will the Foreign Secretary confirm that the Government still do not recognise Mr. Kibaki as having been re-elected President? Did the Foreign Secretary share my concern when the US State Department, in the first crucial hours after the poll, rushed to accept the flawed election result? Has he raised the serious consequences of that critical error of judgment with the US Secretary of State?
	Is it not the case that a rigged election result was both predictable and preventable, when we saw—more than a year ago—the rigging of the Electoral Commission of Kenya by President Kibaki? When in January last year Lord Steel of Aikwood raised the issue in the other place, the Foreign Office said that it would take up the matter with the Kenyan Government. What representations were made and were they made at ministerial level? Does the Foreign Secretary accept that the stacking of supposedly independent electoral commissions seriously undermines the task of any international election monitoring mission even before they arrive? Is he aware that with elections due in Angola, Malawi and Ghana in the next 18 months concerns are already being expressed that certain governments will "do a Kibaki"? Will he undertake to raise with the relevant officials of the EU and the Commonwealth Secretariat the need to reform election monitoring processes so that they begin with preparatory visits to report on the independence of the election authorities themselves?
	I am sure that the Government and the wider international community are right to prosecute the case for political parties to work together, not least to end the violence and prevent further chaos, but does the Foreign Secretary accept that a coalition Government can be only an interim solution, not least because President Kibaki has previously reneged on power-sharing deals with Raila Odinga, as the right hon. Gentleman implied? Does not the only sustainable solution lie in fresh elections? Why have the British Government not already called for fresh elections? Does the Foreign Secretary not realise that there is a massive danger of more violence—

Hilary Armstrong: My right hon. Friend is absolutely right that the people of Kenya are looking to have a Government who reflect the diversity, and not just to one particular tribe that happens to look as though it is successful in an election. Speaking from my experience in Kenya long ago, tribes were always important there, but so too was the ability to work together, certainly in the coastal province where I worked. I would appreciate hearing from the Foreign Secretary about how we intend to work with the international community and local people to get the compromise and accommodation that any democracy with such a diverse population needs to move towards.

David Miliband: My hon. Friend raises an important point, which was discussed at the NATO Foreign Ministers meeting in December. It is always discussed when I meet NATO and other colleagues, because obviously the problem with the Afghan-Pakistan border needs to addressed on both sides of the border. That involves British and other troops on the Afghan side, and large numbers of Pakistani security forces on the Pakistani side. However, in the end, there needs to be a political and not just a military solution in the federal administrative areas.

David Miliband: The hon. Gentleman is right that not least through media that are watched both in Britain and in Pakistan, there is a common political discussion and discourse across the two countries. We try to stay in touch through our contacts both with community leaders and with ordinary members of the community. Personally, I am suspicious of opinion polls that are bandied around as definitive, and I prefer to rely on more qualitative information. I am sure, however, that he would agree that anything that helps to build a decent society in Pakistan that respects all its different communities can help to lessen tensions and contribute to the notion that the vast majority of Pakistanis, whether in Pakistan or Britain, are dedicated to fighting against al-Qaeda, rather than to fighting for it. That is the battle for hearts and minds in which we are all engaged.

David Miliband: The hon. Gentleman raises a really important point, which I have discussed regularly with the high commissioner. As he probably knows, there is a system of ward outreach to British nationals in Kenya, as in many countries, whereby we try to ensure that the vast bulk of them, if not all, are registered with the high commission. The best means of contact, whether that be telephone or other methods such as e-mail, are established so that they can be kept in touch with actions. If the hon. Gentleman has any contact with missionaries whom he thinks might not be part of that telephone or e-mail tree, I am happy to recognise that. However, we are determined to try to ensure that in all countries, such as Kenya, we have rapid systems for making contact with as many British citizens as possible. So far, the system seems to be working, because although we have put on call a series of crisis teams, the number of calls to the Foreign Office in London and to the British high commission in Nairobi has been relatively limited, usually to single figures on any one day. That suggests that the mechanisms that we have in place are working, but we are always happy to try to improve them.

Patrick Mercer: The Foreign Secretary is very aware of the desire of al-Qaeda and similar organisations to inflict mass casualties. Is he confident in the security of nuclear weapons and material in Pakistan?

Henry Bellingham: If an EU monitoring commission finds that the presidential elections were rigged, does the Foreign Secretary agree that Kibaki's position would be untenable and that he would rightly become an international pariah? In such circumstances, does he also agree that smart sanctions aimed at Kibaki and his cronies, their travel arrangements and moving money abroad, would be justified?

David Miliband: Sanctions are only but always justified when they have a clear objective and contribute to it. It is dangerous at this stage to start dealing in the hypothetical position that the hon. Gentleman outlines because there is clearly a need to bridge the current gap between what the Government in Kenya and the Opposition say about their willingness to engage in discussions. They are both talking about the matter but they have not yet bridged the gap. Our focus is on bridging that gap. If we fail, we must examine all the consequences, including those of our actions.

Nick Herbert: I thank the Secretary of State for early sight of his statement.
	Prisons are places of security, in which there can be no place for industrial action. That was why the previous Conservative Government legislated for the statutory prohibition of industrial action in prisons. Does the right hon. Gentleman recall that the Labour party fought tooth and nail against those laws in opposition? Indeed, when he was Leader of the Opposition, Tony Blair said that they were a
	"wholly unwarranted attack on the working rights of prison officers".
	Is it not therefore extraordinary that, having dismantled the statutory ban, the Government should now be threatening to put it back in place?
	We are now being asked to debate new clauses in 48 hours' time, when the Secretary of State has known about the problem for months. Will he assure us that there will be sufficient time on Wednesday to debate those and other important amendments that the Government have tabled since the Second Reading of the Criminal Justice and Immigration Bill?
	The Secretary of State said that the status of prison officers was "similar to...other essential services, such as the police and the armed forces", where "the risk to the public...is simply too great to allow them to take industrial action." In that case, what was the justification for repealing the statutory provision in the first place, when it placed prison officers on the same footing as the police and the armed forces? Has not the inadequacy of the Government's no-strike agreement been revealed by the fact that the Secretary of State has been forced to make his statement today?
	In 2001, when he was Home Secretary, the right hon. Gentleman made it clear to the House that independent arbitration on pay would be provided "in recognition" of the repeal of the statutory ban and its replacement with a no-strike agreement. That was the deal that the Government made with the unions. Why, then, are Ministers surprised that the Prison Officers Association considers that deal to have been reneged upon, when the Government have reduced the value of a pay award made by the pay review body?
	When the former Home Secretary, the right hon. Member for Sheffield, Brightside (Mr. Blunkett), announced the repeal of the statutory ban on strikes, that announcement heralded an era of modernisation, reform and change. Have we not actually seen crisis, incompetence and wildcat strikes? Why did the Secretary of State claim to have been surprised by last August's wildcat action, given that it was clear to everyone else that relations with prison officers were deteriorating so fast? Does he accept that the Government's troubles with prison officers go beyond pay? Is it not a fact that conditions for prison staff have worsened significantly over the past 10 years? Prison officer numbers have risen at half the rate of the prison population, chronic overcrowding is putting immense strain on the service, assaults on prison staff have soared by 80 per cent., and now budgetary cuts mean the prospect of prisoners' being locked in their cells throughout weekends. Is it any wonder that prison officer morale is so low?
	Coming into office, the Government promised
	"partnership not conflict between employers and employees."
	Now we have conflict with the police and conflict with prison officers, and no doubt there are further conflicts to come. Has not this emergency statement been forced by a crisis entirely of the Government's own making?
	Ministers repealed no-strike legislation, and within three years they are having to reinstate it. Is that what they mean by a relaunch? They have mismanaged the public finances, mismanaged public pay and mismanaged prisons. Is it any wonder that this Government have acquired a reputation for serial incompetence?

Jack Straw: My hon. Friend is always right about these matters. As she says, the hon. Gentleman needs to do his homework.
	There are two things to be said about the position taken by the Opposition in 1994, about which the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) will doubtless ask a question. If the hon. Gentleman bothers to read the report of the debates that were held at the time, he will see that the allegation that we fought the proposals "tooth and nail" is hardly an accurate description of the criticism expressed from both the Liberal Democrat Benches and ours. My right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael), who led for the Opposition, made the point that if there were to be a restriction on prison officers' right to strike, it had to be balanced by other measures. Moreover, in the three years when I was shadow Home Secretary, I never gave a single undertaking that we would repeal section 127; neither did I do so at any stage when I was Home Secretary, nor did my successors.
	My right hon. Friend the Member for Sheffield, Brightside would have preferred, as would the Delegated Powers and Regulatory Reform Committee, that the change to section 127 be made by way of its suspension, rather than its repeal. That was not possible in the circumstances, but when the measure came before the other place—with the support of the Opposition, who were not making these nitpicking points at the time—clear undertakings were given that in the event of termination of the JIRPA, we would re-introduce the ban.
	I have dealt with the point about chronic overcrowding. There is a degree of overcrowding, but it is nothing like that within the Prison Service in the 1980s and early 1990s. The ratio of prison staff to prisoners has remained stable at between 1:21 to 1:22. However, quite a lot of the duties previously undertaken by prison officers are now undertaken by operational support grades—for example, people working in gatehouses who do not have direct contact with prisoners. Before the hon. Member for Arundel and South Downs next makes that point, the question for him is whether he is proposing that a future Conservative Government, whenever that might be, would reinstate those jobs to prison officers. If not, what on earth is the point he is making?

David Heath: I genuinely thank the Lord Chancellor for giving me early sight of his statement; it is a good start to the new year.
	Is not the only thing that could exacerbate the chaos that the Government have created in the Prison System a wholesale withdrawal of good will by prison officers? Strikes are never appropriate in prisons, but no-strike arrangements can work only when there is effective dialogue and trust—an important word—between the work force and management or Government?
	In the draft that the Lord Chancellor kindly sent me, there was an unfortunate typographical error. At one point, it said that the Government sought to "misapply" the statutory prohibition. Is not that exactly the problem of trust between many in the public service—particularly the uniformed branches of the public service—and the Government? They do not trust the Government not to misapply the arrangements in these areas and there is a strong feeling that they are increasingly taken advantage of as a result. Is that not exemplified in one of the problems with the Prison Officers Association—the staging of pay awards?
	Will the right hon. Gentleman explain why the staging of a pay award is counter-inflationary when the same point is reached by the end of the year? It is rather a case of providing slippage within departmental budgets. Should not we have clear arbitration binding not only on the work force, but on the Government and the management ? Is the Lord Chancellor confident that any contingency plans involving the police will be substantive—if, indeed, the police are asked to intervene in circumstances almost identical to those of their own grievance with the Government?
	Mr. Sweeney makes an important point in paragraph 4.7 of his report:
	"In my opinion industrial relations between the SPS"—
	the Scottish Prison Service—
	"and the Scottish members of the POA are far more positive than those between HM Prison Service and the POA in England and Wales. This reflects the commitment of both sides to building a positive working relationship",
	which has been the case
	"over the last six years."
	Why is there that difference between the circumstances in Scotland and those in England and Wales? Given the increasing permeability between the private and the public sectors, will the prohibition apply in similar terms to those working in the private sector within the prison system? Should we not recognise the very difficult job that prison officers undertake on our behalf and ensure that their efforts are properly recognised, along with those of other members of the uniformed services?
	The Lord Chancellor did not answer the point made by the hon. Member for Arundel and South Downs (Nick Herbert) about the Criminal Justice and Immigration Bill. The Bill now extends to two volumes and has more than 170 clauses and a second volume of schedules, and it addresses matters of huge importance to Back-Bench—and, indeed, Front-Bench—Members. The Lord Chancellor is now interpolating yet another section into the Bill. Does he really believe that this House is being properly dealt with in being provided with a single day to discuss the Bill's remaining stages? Is it not inevitable that large parts of important proposed legislation will remain undebated by this House, and that the attentions of the other House will be required to put that right, as is so often the case?

Julian Brazier: Canterbury prison is in my constituency. Will the Secretary of State accept that one of the key reasons behind the huge rise in attacks on prison staff and the inevitable effect that that has on morale is the progressive undermining of the disciplinary climate by human rights legislation? What message does he have for those warders who were unable, in a well reported case last week, to deliver a prisoner to court because he was deemed to have a right to continue to occupy his cell because somebody else might otherwise take it?

Jack Straw: I simply disagree. We have been far more effective at managing prison numbers than the Administration the hon. Gentleman supported for 18 years ever were. That is measured by the fact that we have not had to use police cells anything like as often or as extensively as happened repeatedly under the previous Administration. Nor have I ever had to come to the House as Douglas Hurd did to announce the release of 3,500 prisoners just like that, so I want no lectures at all

Peter Hain: I beg to move, That the Bill be now read a Second time.
	It is the duty of every Government to keep the contract between the state and the individual under constant review to ensure that the balance between rights and responsibilities is properly maintained. At the end of last year I set out how that contract will be renewed through welfare reform, as we move from a regime of passive benefits to one of active benefits. The Bill will enact the remainder of the landmark pensions reform package set out in May 2006 in the White Paper, "Security in retirement: towards a new pension system", the first part of which became legislation in the Pensions Act 2007.
	The Government have achieved a lot since 1997. We are spending £11 billion more on pensioners each year than would be spent if the policies of the last Conservative Government had been followed. This year we have spent £75 billion on provision for pensioners—around 13 per cent. of all public spending. Pension credit, winter fuel payments, free TV licences and above-inflation increases to the basic state pension have brought more than 1 million senior citizens out of relative poverty. Rolling out free bus travel right across Britain has also extended opportunities for pensioners. However, the challenges posed by our ageing society mean that we have to look ahead not a year at a time, but decades at a time.
	Our changing demographic profile opens up increasing opportunities for baby boomers—those of us born between 1945 and 1965—in the "active ageing" category. Looking around the Chamber, I see that we are well represented. However, those changes also present immense challenges, not least in preparing for the future. The reality, and perhaps the irony, is that as our society gets older, pensions increasingly becomes a young person's issue. In the next 50 years the number of people over pension age will increase by more than half, meaning that there will be only two people working for every one person in retirement, compared with four working people today, and 10 working people 100 years ago.
	The cost implications of that increasing longevity for our children and grandchildren are arrestingly stark. Many more people expect to be active longer in retirement and need the resources to fund that. Unless we act now, and act decisively for the long term, we will bequeath a nightmare for future pensioners plunged into poverty, and for future taxpayers, grappling with the consequences. We have already addressed some of the issues identified by Lord Turner's commission. We have legislated for a simpler, fairer and more generous state pension system. In addition, about 75 per cent. of women retiring in 2010 will receive a full basic state pension, and by 2025, over 95 per cent. of men and women will retire with a full basic state pension.

Peter Hain: My hon. and learned Friend and I are aware of my hon. Friend's point; I know that she has championed the interests of that group. We will keep the issue under review and continue to consider it. We are not unwilling to do anything about it, but finding a way to target the issue appropriately is the problem. We shall certainly keep it under review and will be happy to continue to discuss it with her.
	A guaranteed basic standard of living for pensioners forms the platform of our side of the renewed contract between the state and the individual, but we need to go further. We will restore the link to earnings, abandoned by a previous Conservative Government, by 2012. By 2050, the basic state pension will be worth more than twice as much as it would otherwise. That, in addition to the reforms to the state second pension, will ensure that people retiring in 2050 who have worked or cared for about 40 years will receive about £145 per week of state pension in today's earnings terms.
	We also want to strengthen provision to support existing occupational schemes by simplifying the rules governing them through a rolling deregulatory review. The decline in private sector occupational pension provision since the late 1960s is serious, and in the face of increasing costs employers have been abandoning their defined-benefit—that is, final salary—schemes, whose active membership numbers have fallen from 8 million in 1967, to 5 million in the 1980s and 1990s, to fewer than 3.5 million today.
	We want to reduce the burden on current pension schemes by reducing the revaluation cap on deferred pensions to 2.5 per cent. from 5 per cent., saving the industry, over time, an estimated average of £250 million a year, to encourage as many final salary pension schemes as possible to remain in existence. Importantly, that would apply only to rights accrued after the change; anyone who has already deferred a pension would be unaffected. Any rights built up by existing members until the point of any change would also be subject to revaluation under the current regime. That is a reasonable step to take. At the very least, it sends a strong signal of our intention to reduce burdens on current schemes, encouraging employers to keep existing defined-benefit schemes open while protecting the needs of employees.
	The deregulatory review will not, of course, end there. We will also work further with the industry on some of the more complex issues and continue to seek out and cut unnecessary burdens, encouraging employers to keep existing schemes open while balancing the needs of the employee.

Joan Humble: Although the legislation proposed today will enormously benefit the millions of workers who do not currently have pensions, there is a concern for the people about whom the Secretary of State has just been talking—those who have a pension scheme from their employers. Those employers may use the opportunity of the new personal accounts to level down employees' current pensions and reduce their contributions to the 3 per cent. proposed in respect of the personal accounts. What measures will my right hon. Friend take to ensure that that does not happen and that those employees are protected?

Peter Hain: I am grateful for my hon. Friend's general support. This is a defined-contribution scheme, not a defined-benefit scheme, so I am not in a position to say what the final income would be. As regards the 3 per cent. figure, with tax relief and the individual's own contributions, their own minimum contributions would effectively double. That is a considerable boost to retirement income. The 3 per cent. figure was a consensus that came out of Lord Adair Turner's review and the wide consultations that were carried out on behalf of the Government, including with the Pensions Commission. This is an essential floor on pensions for the future without which we face dire straits indeed.

Oliver Heald: Does the right hon. Gentleman accept that the average payment that employers make into final salary schemes is 14 per cent., and the average for defined-contribution schemes is 6 per cent., yet only 3 per cent. is being proposed for the personal account? Does not that raise the concern that everything needs to be done to make it easy for employers to automatically enrol people into those better schemes? What is he doing about the European rules that are creating such a problem for group personal pensions?

Peter Hain: I am not sure about the hon. Gentleman's 14 per cent. figure, but I will certainly have a look at that. Let me deal with his final point on workplace personal pensions and the European directives. We are not satisfied that the European consumer protection legislation permits automatic enrolment into workplace personal pensions, and we are seeking clarification on that or, if need be, amendment of the directives to permit such enrolment. In the meantime, we are exploring a practical solution with the industry. However, in any such solution that my hon. and learned Friend and I seek to agree with the industry, I do not want in any way to undermine personal accounts. That is Lord Turner's view and the view of the chairman and chief executive of the Personal Accounts Delivery Authority. Working with the whole industry and all stakeholders, we are seeking to ensure that we get the best possible outcome. First, nobody has said that the Bill does not propose the consensus solution, because it does, and secondly, nobody has come up with a better, more affordable option. We have to work together with stakeholders to ensure that this works.

John Greenway: The Secretary of State is reassuring on the levelling down of contribution amounts. However, for many of us, the more critical question concerns the continuing drift of the level of contributions paid by employers out of defined-benefit schemes into defined-contribution schemes. Is his mind still open to the suggestion from the Association of Consulting Actuaries that there should be new indexation arrangements that would allow more defined-benefit schemes to continue, not only for existing members but for future members? Many young people will not enjoy the same pensions as our generation—which he mentioned—unless something is done.

Peter Hain: I agree with the hon. Gentleman that the slippage—it seemed at one point that it might be a haemorrhage—from defined-benefit and final salary schemes to defined-contribution schemes needs to be arrested. I hope that with the deregulatory review—this is the industry's view, and I expect it to deliver on it, given that we are making life easier and providing an extra £250 million in funds for pension schemes—we will see a stop put to that and will keep final salary schemes and defined-benefit schemes as much as possible.
	On the ACA's proposals, we obviously continue to consider all those things. The matter was raised with me at a dinner with representatives of the pensions industry, when one representative asked whether I was strongly in favour of the risk-sharing alternative. The rest of the representatives, who were reasonably representative of the industry, turned on the man who asked me the question and said, "No, we don't want to have anything to do with it." I believe someone is looking into that. Obviously, we will continue to consider everything.

Harry Cohen: The Secretary of State has acknowledged that he does not know what the outcome rate will be—that is, the pension that an individual who contributes will receive at the end of the day. It may well be that 3 per cent. is insufficient as an employer's contribution. There certainly was not consensus on whether that was the right amount. There was not enough information. Why is the figure of 3 per cent. set in stone in the primary legislation? Why was it not introduced as a regulation, which can be more easily altered if the circumstances demand that that should be the case? Did the Secretary of State cave in to the CBI?

Peter Hain: I understand my hon. Friend's point, which he made in an appropriately vigorous manner. He has been a champion of pensioners for a long time. As I said, the figure was a consensus figure. The industry was concerned that it should be in the primary legislation. To move forward in a fashion that enabled us to have a serious prospect of getting some 7 million people without an occupational pension scheme into personal accounts, we needed to take the industry with us. That is where we are. That is the nature of delivering our proposals. Of course, we will keep the position under review. My hon. Friend should continue to make his points with his customary vigour, and I look forward to that experience.

Peter Hain: Obviously—in the sense that any enterprise's bottom line includes all the costs, such as employer contributions. However, it does not follow that the money would have gone on extra salaries. The 3 per cent. figure becomes 8 per cent. in the context of the total contributions to funding the scheme.
	All the progress that we have made in cutting unnecessary burdens and encouraging, as I was pressed to do, people to keep existing final salary schemes open, while balancing the needs of the employer, is important and will help, but will not provide the full answer to the issues that Lord Turner and his commission raised.
	There is a serious problem of undersaving, with perhaps as many as 7 million people not saving enough to fulfil their aspirations in retirement. Unless that is tackled, a chasm will grow between the income that they want and that which they receive in retirement. There are many reasons for people not saving. Many on low incomes or with broken working patterns do not have access to a workplace scheme. Some will be put off by the complexity of pensions while others will simply live for today. Some will lack confidence in pensions. That is why the Government set up the Pension Protection Fund, which safeguards more than 10 million memberships of eligible defined-benefit occupational pension schemes throughout the UK. It is why we established a more powerful pensions regulator and delivered, through the financial assistance scheme, a fair and just settlement for 140,000 people who were robbed of their pensions.

Julie Morgan: I want to take this opportunity to congratulate my right hon. Friend on the written statement before the recess. It is regrettable that there was not an opportunity to make a verbal statement, which would have allowed to me to say how pleased I am that that long-running saga has ended. Is he aware that during the holidays I received many telephone calls from ex-Allied Steel and Wire employees in Cardiff, who said how pleased they are that we have finally secured that achievement?

Peter Hain: I am going to deal with that problem in a few minutes, and the hon. Gentleman can come back to me at that point. We are doing something very radical; I do not think that there is anything like this anywhere else in the world, which is why it is so important to get it right and deliver it with the maximum consensus.
	As a result of our reforms, between 6 million and 9 million people will either be newly saving in a workplace pension or saving more than they would have been. That includes more than 1 million people currently in workplace pension schemes who are getting either nothing or less than 3 per cent. from their employer. We anticipate that up to 7 million individuals may join the new national scheme of personal accounts. It will be a simple, low-cost pension saving scheme targeted where the need is greatest: moderate to low earners currently without access to a workplace pension scheme.
	The scheme will have low charges, allowing employees to keep more of their savings, and their contribution, combined with that of employers and tax relief from the Government, means that their own pension contributions will be at least doubled up front. All employees will now have the chance to save, and having a pension will be the norm. That will transform the savings culture in the UK, boosting overall pension contributions by around £10 billion annually by 2015. Automatic enrolment into a pension scheme is widely recognised as the most effective way of combating inertia and myopia.
	About one in six employees are working for firms that already offer automatic enrolment, which include some of the most highly respected companies in the UK. The Bill will extend that opportunity to those currently without such access. We recognise that designing and delivering such a pension scheme is not a job for the Government and therefore we have set up the Personal Accounts Delivery Authority—PADA—to advise on, design and bring about the implementation of the reforms. We intend to extend the remit of PADA to enable it to design and build the infrastructure for the personal accounts scheme. We will also ensure employers' compliance with the new duties through the pensions regulator, who has proved to be a very effective regulator of UK occupational pensions over the last two years. The regulator is best placed to deliver an effective compliance regime that does not overburden employers. It will be a light-touch regime, but it will deal effectively with those who refuse to comply.
	Politicians from all parties are often accused of putting too much emphasis on sending messages, but it is important that a clear message from the whole House is sent to those who may not face retirement for decades but who need to prepare for it now. That is why maintaining the consensus that was built up on pension reform—a greater degree of consensus than on virtually any other complex policy issue in my experience—is so important. If people are to have the confidence to invest in pensions for the future, they need to know that the rules of the game will not be changed by a future Government. Help the Aged, the Equality and Human Rights Commission and Age Concern, as well as key representative bodies such as the Engineering Employers Federation, the TUC and the National Association of Pension Funds, have publicly acknowledged and emphasised the importance of maintaining the consensus.
	I read that the hon. Member for Epsom and Ewell (Chris Grayling) has "reserved his position" on the Bill, hinting that he and his party may ultimately vote against it. I say to him that we all have a duty to place the long-term interests of future pensioners ahead of short-term party positioning. It would be simply reckless for the Conservatives to abandon the hard-won consensus on pension reform and vote against the most momentous change in pensions since the introduction of the state pension a century ago.

Peter Hain: Very few did.
	This Bill, alongside its predecessor, will be considered equally historic. It is a blueprint for a new understanding between individuals, employers and the state, which will give all workers the chance to take control of their own retirement, providing for themselves and their dependants. These radical reforms are necessary to the establishment of a sustainable, affordable and trusted pensions system, which will meet the needs of the country and future generations by delivering security and dignity to all in retirement on the basis of on new responsibilities: employer responsibility through contributions to a pension scheme, employee responsibility through employee contributions to the scheme, and Government responsibility through an improved state pension linked to earnings.
	I commend the Bill to the House.

Chris Grayling: I am afraid that the hon. Lady clearly does not understand the pensions system. Issues involving defined-contribution pensions have nothing whatever to do with the collapse of direct-benefit occupational pension schemes.
	In the wake of what has happened, I urge the Secretary of State to ensure that payments to the pensioners who lost out begins as soon as possible. He and I have talked about the practical difficulties in relation to the way in which the financial assistance scheme is being run. I think that we should give the claimants the benefit of the doubt, and start paying them as quickly as possible. I assure the Secretary of State that he will have our support if he can find a way of ensuring that that is done.

Richard Burden: I think that most Labour Members do understand the relationship between the two issues. My right hon. Friend the Secretary of State asked the hon. Gentleman a question earlier and I am still struggling to understand whether he has provided an answer. It is not a question of whether there is a relationship between means-testing and automatic enrolment and possible problems there, but of what he would do about it. What is he suggesting? I still have not heard anything from him on that.

Mike O'Brien: I am listening in bewilderment. Today, one in six people are automatically enrolled into their pension schemes. Many of those who have been automatically enrolled today on pension credit because their second pension has not put them above the levels to which they should be entitled. Is the hon. Gentleman now suggesting, as he did on Radio 4's "Money Box", that every pensioner in that position today and from here on would have to have their contributions refunded? Would every private pension scheme have to do that? Is that what he is suggesting?

Chris Grayling: The hon. Gentleman will have to ask the Secretary of State that question, or the Minister who will wind up the debate.
	We know that people in this country have a propensity not to save. By any current standard, the local authorities pension scheme offers attractive benefits, yet local authorities struggle to get all their employees to enrol. We can understand why: we are talking about people who are earning some of the lowest wages. Most people earning £12,000 a year would rather not put aside money out of a tight household budget each week to save for retirement.
	What will happen? Whatever I say, or Ministers or other people say, in 2012—or whenever plans are now due to be launched—the same story will be written. Does anyone in this Chamber honestly believe that in 2012 " Sun money" or " Mirror money" or the money column in our local papers will not write stories saying that because of means-testing some people will lose out if they save in a personal account? Does anyone honestly believe that that will not happen? Does anyone honestly believe that some small employers faced by an unwelcome increase in their wage costs will not quietly show those stories to their employees? Does anyone honestly believe that employees generally will not chat about these issues in the pub or the sandwich queue? Does anyone honestly believe that the number of people who decide to opt out of personal accounts will not increase as a result, with the consequence that future generations and future Governments will have to bear a much larger cost for means-tested benefits than they would have done had these reforms worked as intended?
	I simply do not understand why Ministers are behaving like ostriches with their head in the sand. Having a proper debate about solving the problem would not undermine the consensus; it would strengthen it. Ministers seem convinced that providing generic advice to potential savers will do the job, but how much real advice do they think they can provide to people from a low-cost product that will have to pay off the start-up costs of the first years of its operation and that will be at the lowest possible end of affordability within the pensions market?
	The Minister asks what we should do. Many alternatives have been suggested to the Government. Two detailed approaches have been produced by the Pensions Policy Institute, looking at potential options such as raising the limit for trivial commutation. I have suggested to Ministers—it is only a suggestion and I would happily talk privately to them about it—that we might be able to offer those who lose out some form of money-back guarantee, perhaps through a higher lump-sum entitlement. However, Ministers do much to undermine the concept of consensus by not saying in response, "That's an interesting idea; we'll take a look at it"; instead, they accuse us of making uncosted commitments and coming up with ideas without foundation. They do not seem to understand that nobody except them has the ability to work all this through in detail—not Her Majesty's Opposition, not the Liberal Democrats, not the right hon. Member for Birkenhead (Mr. Field), not the PPI, not the CBI, not the Association of British Insurers. Only the Secretary of State and the Minister have access to the necessary modelling, data and information to be able to look properly at the options—to be able to look at how much it would cost us to do nothing and how much it would save us to do something.
	Will the Secretary of State carry out a proper public assessment of the available options? Will he look at all the alternatives that have been suggested and what they will cost? Will he look at the cost implications of higher or lower levels of take-up, and the impact on the cost of means-tested benefits in the future? Will he do that work, because he has the teams of people to do it—I do not have them, and neither do the Liberal Democrats? After he has done that work, will he lay a paper before this House? We could then have private and public meetings; let us discuss these issues and between us try to work out a solution. The Secretary of State cannot refuse to have such discussions and to provide access to his databases and to allow all of us to look at the options, and then accuse us of undermining the consensus; that is not good enough.
	Means-testing is not the only area where we are unconvinced that the Government have got things right yet.

Chris Grayling: If the hon. Lady really had taken an active interest in pensions for all those years she would understand both the difference between a DB scheme and a DC scheme in terms of the issue of mis-selling and that the original Turner report made its recommendations on the assumption that there would be no expansion of means-testing—indeed, that the opposite would be the case. I have made a request to the Secretary of State and the Minister in the spirit of the consensus of us all wanting these reforms to work. I hope that that will be taken up in the winding-up speech or at any stage over the next few weeks, as it is essential that we get this right.
	Let me turn to other areas where there remain issues that need to be debated. Ministers need to explain in much more detail how they are addressing the issue of levelling down. Concerns have been raised about that in the debate, and it has been raised as a concern by the PPI and actuaries over the past few weeks. Ministers have not had that much to say about it. The Secretary of State tried to reassure us but did not address all the issues. There is a danger that many small employers will choose to close down existing provision, including some of the stakeholder schemes that got off the ground as part of the Government's last set of reforms. The risk is that if levelling down does take place the amount saved will be affected and there will not be the increase in overall saving levels that we want to see.
	Ministers should remember that the success of these reforms will depend not only on attracting more savers, but on generating higher overall saving. That is why the Secretary of State must do better in ensuring a level playing field for different types of pension provision, and particularly different types of pension product. It would be disastrous if existing provision was downgraded because it was easier to operate a system of personal accounts.
	That is why the Government's failure to sort out the issue of auto-enrolment for group personal pensions is so disappointing. There is no logical reason why auto-enrolment should be acceptable for personal accounts but not for group personal pensions. We know that, in fact, the reason that has not happened is European law, but why have not Ministers sorted this out in Brussels? Does anyone actually believe that the Secretary of State's French counterpart would not have sorted things out by now? There might even be solutions that avoid Brussels altogether. There have been detailed discussions between the Secretary of State's Department and the industry, which has identified possible solutions to this problem, but he and his team have not acted on them. Why not? Will he introduce amendments to the Bill in Committee that will address this issue?

Danny Alexander: As often happens on these occasions, I have the pleasure of following the right hon. Member for Birkenhead (Mr. Field), who made perspicacious comments on the Bill. I start by echoing what he and hon. Members from all parties have said about the Government's announcements on the financial assistance scheme. After a good deal of campaigning—the Secretary of State and the Minister for Pensions Reform attended demonstrations in Downing street and so on to hear directly from the pensioners concerned—an issue that had been a running sore for far too long was resolved. Those Ministers deserve a good degree of credit for what they have achieved in that respect, and have rightly been given that from both sides of the House.
	As has been said, there is now a need for speed in implementing these reforms, and I agree with the Secretary of State about the Bill being a way to achieve that. I should draw his attention to one other thing in that respect. The Pension Protection Fund is an organisation and administration that is already trying to run schemes that have many of the features of the new version of the financial assistance scheme. The PPF could be given the role of speeding up the administration of the FAS and its new characteristics. I press the Secretary of State, if he has not already done so, to consider that option urgently as a way of ensuring that those pensioners get the money that they are now due to receive as quickly and as happily as possible.
	I start by giving a general welcome to some of the proposals in the Bill on the personal account scheme. Some of the features embodied in the Bill are welcome—for example, the principle of automatic enrolment, the principle of compulsory employer contributions and the principle of low charges, although I have concerns about how we can be sure that that will continue once the personal accounts board takes over from the Personal Accounts Delivery Authority—based as they are, in part, on the only relevant international example, the New Zealand KiwiSaver scheme, which is delivering some benefits in that country. The Liberal Democrats have proposed such a scheme with such characteristics for a number of years, so it would be churlish not to recognise that the Government have come forward with a proposal that has many welcome features.
	It is important to try to move on from some of the slightly shrill exchanges that have taken place. We want the Bill to work, but for that to happen some big, serious and important problems need to be debated and resolved. We believe that the important two related issues are the interaction of means-testing and how advice will be dispensed and dispersed.
	We want consensus, but all sides need to enter into that. Developing a consensus means that all sides must listen, must give way and must work to maintain it. It is not good enough for the Government to say, "Here we stand. This is the consensus. Come and join us or be vilified for failing to adopt the policies that we have put forward in this Bill." A consensus needs to be built, and that means give and take on all sides.

Peter Hain: I cannot disagree with what the hon. Gentleman is saying, but I remind him that the Government have not said, "Here is our consensus, take it or leave it." The consensus was built up through the pension commission headed by Lord Turner. It took some effort to find a way forward for a problem that we all acknowledge to be serious and that is where the consensus comes from. In the course of the Bill, if the hon. Gentleman makes some practical suggestions—I will certainly look at what he has said so far—we will see what we can do.

Danny Alexander: I am grateful to the hon. Gentleman for his interest, but we need to aim for what is defined as the poverty line—the minimum income guarantee in the current pension credit. My maths is not quick enough to work out whether that would be 25 per cent. but it probably does not quite reach that amount. The hon. Gentleman's proposal is a further degree of ambition, from a policy and financial point of view, to which I cannot agree at this stage. However, the citizen's pension would certainly be one way of providing a firm foundation whereby anyone saving in a personal account would know that they would receive full value and full return on their savings.
	The most frustrating thing about the Government's attitude to means-testing is that, in effect, they throw up their hands in horror saying, "It's someone else's problem—think of an answer". If both sides of the House accept that there is a problem and that it will not be worthwhile for some of the people—probably hundreds of thousands—who will be encouraged to save in a personal account to do so— [ Interruption. ] The number may be higher; it may be millions, as the right hon. Member for Birkenhead suggests. I am not sure whether that is right, but in the absence of the proper research and information that the Government could provide, it is hard to know. Even if the number is only hundreds of thousands—

Danny Alexander: The right hon. Gentleman is right about the figures, although to be fair to the Government, if we are talking about people who get back less than they put in, some of them will have built up a big enough pension pot to ensure that they receive some return on their savings even if it is not the full return we hope everyone will get, especially if the compulsory employer contribution is set up correctly.
	The Government seem to be saying that it is up to other people, such as Opposition parties or think tanks, to find a way out of the problem. To reinforce the point made by the hon. Member for Epsom and Ewell (Chris Grayling), the Government have the resources, as well as the civil servants and policy wonks, to work through a range of options. They have not done so, and given the importance that many of the lobby groups, who broadly support the Government's proposals, and the House attach to the issue it is astonishing that the Government have not done more work. If the consensus is to be maintained I appeal to them to do that work as a matter of extreme urgency.
	Advice will be needed. A wide range of factors will affect people's decision about whether it is worth their while to save: age, future earnings, whether they plan to take time off work, the sort of work they do and their level of personal indebtedness. Advice will be required on all those factors. It may be relatively straightforward to reflect some of them in a generic advice system, but it will be much harder to do so for others, such as the affordability of contributions, indebtedness or likely future earnings. The Pensions Policy Institute concludes:
	"People will need very clear information to help them make informed decisions about whether they should stay in or opt out of personal accounts. Any system of generic advice will need to be able to cope with providing advice to a wide range of individuals with different characteristics and financial circumstances."
	Likewise,  Which? believes that
	"generic advice arrangements on a one to one basis, probably through a telephone advice line but possibly supplemented by face-to-face provision must be included".
	Unfortunately, the Bill leaves all aspects of the advice system to be determined by regulation at a later date. Presumably the Government will say that is because the Thoresen review is still under way and they are waiting for its recommendations.
	That is not good enough. We need a well worked-out advice system, which will not impose extra costs on personal account holders, if the risk of mis-selling to some groups is to be avoided. In another context—personal debt, which is a huge problem—my hon. Friend the Member for Twickenham (Dr. Cable) proposed the establishment of a national network of financial advice centres. The Government should actively work with the financial services industry to achieve a national roll-out of independent advice centres, providing financial health checks and advice.
	At present, following the new polarisation rules, it is difficult for many consumers to obtain independent financial advice. The CAB provides advice, but usually only for people who are already in debt difficulty. A network providing genuinely independent advice would be in the best interests of the financial industry, the pensions industry and particularly the Government in relation to personal accounts. It would help to restore confidence. Clients could be offered advice on a wide range of issues, including personal accounts. Setting up such a network, with proper resources from the taxpayers, not from personal account holders or through the Personal Accounts Delivery Authority, would enable us to offer the range of advice people need.
	The Bill offers us a chance to address the issue of women's pensions, to which the Secretary of State referred. He was talking about the Government's disgraceful decision, sneaked out on 17 December in the House of Lords, that they had decided to make no change in the current rules to allow individuals to buy additional national insurance contributions—to top up their contributions to take advantage of the new rules that are coming in. There have been reports of a trade-off with the Treasury—the financial assistance scheme or Baroness Hollis's proposal.
	The Government have done the right thing on the FAS, but I give the Minister for Pensions Reform notice that we shall return to their pensions decision during the passage of the Bill. Members on both sides of the other place may want to do so, too. At present, there could be the absurd situation that female twins born on either side of midnight on 5 April 1950 have different pension entitlements, despite a work record as identical as their physiology. That cannot be right.
	There is also the important issue of levelling down to address. It is of course hard to predict how employers will respond to the increase in costs that some may face as a result of auto-enrolment, but there is some evidence. Department for Work and Pensions research, quoted in the National Association of Pension Funds briefing for the debate and in the response to the Work and Pensions Committee, shows that 30 per cent. of employers contributing 3 per cent. or more say that they will level down to 3 per cent., with a further 19 per cent. saying that they have not yet decided how they will respond. The Minister may well have new evidence, but the Secretary of State said in his speech that half of employers would maintain or improve the conditions for new entrants to their pension schemes. That prompts the question: what will the other half do? The serious issue of levelling down therefore needs to be addressed.
	Under the Bill, the resolution on the issue of workplace personal pensions is highly unsatisfactory. We are talking about an argument that the Government could win in Europe. It is simply not good enough for the Minister to put his hands up and say, "We cannot persuade other European Governments." There is very little evidence to suggest that the Government have really tried. I suspect that if a proper effort were made to persuade other European Governments, it could be done quite simply, given the common-sense argument being advocated on automatic enrolment. The situation is perhaps evocative of the Government's attitude to matters European. Their attitude is to turn up to meetings with exceedingly bad grace, if they bother to turn up at all, not to contribute in the way that they could at the European level, and not to put forward the arguments for what they want. The argument is one that we could win.
	One suspects that if the Government of France, Germany or another European country faced the same problem, they would be busy winning the argument well before the 2012 date, not putting their hands up and saying, "We've got to try to find another way round the issue, although it may impose substantial additional costs on the employers concerned." I urge the Minister to go to the European Union and to win the argument. I suspect that with the proper effort and commitment, the argument could be won straight out.
	There has been a lot of talk about consensus in the debate, but in future, and particularly in Committee, that consensus has to be based on proper debate and a proper resolution of the genuine concerns and worries about the Bill and the personal accounts scheme. However welcome, well-thought-through and well-constructed they are, they have to benefit as large a section as possible of the target audience, which is people who do not currently save. That is why the arguments on means-testing and advice are so important. The Minister will have to do better in his reply than the Secretary of State did, and will have to do better throughout Committee to ensure that the issue is resolved, so that we can ensure a scheme that can genuinely be recommended to everyone in the target audience.

Alan Simpson: I hope that it does not damage the standing or career of the Secretary of State or the Minister for Pensions Reform if I, too, congratulate them on making tonight's debate worth having. If they had not intervened effectively to restore the stolen pensions of the 125,000 pensioners affected, the House would have had to understand what my right hon. Friend the Member for Birkenhead (Mr. Field) said, which is that huge numbers of walking newspapers across the country would have been saying to their families, friends and communities, "You've got to be a mug to save." If the pensions guarantee was not a guarantee, it would have been worthless. The changes that the Secretary of State has been able to make really transform the context in which the debate takes place.
	Between them, the Secretary of State and the Minister have done what none of their predecessors were willing to do. Predecessors did the House, and the Labour party, a disservice by requiring Labour Members to parade through the Division Lobbies making fools of themselves by claiming to support a financial assistance scheme that never did, and never would, work. We all owe both the Ministers of State and the Secretary of State a huge debt of gratitude for getting us out of a hole. However, let us try to put that in the context of where the Bill takes us. I have no doubt that as a society we need to save more and spend less. In a society that increasingly expects to live longer, the issue is more a biological than a political one. The question is how we make good provision for the increasing length of the part of our life that we expect to spend in old age, and in receipt of a pension. The question is how we get there.
	My worries about the Bill concern what it does not address, rather than what it tries to address. In a sense, it does not address the failures—the legacy of successive Governments who have messed about with pensions provision and retreated from a policy that would genuinely be fit for the 21st century. We are still not addressing our collective failure to restore the value of the state pension, as well as its link with earnings. We are not addressing our failure to halt the retreat from defined-benefit schemes, and the drift into defined-contribution schemes. We are not addressing questions about the ability of the poor to pay into schemes—a concern that a number of Members have legitimately raised—and we are not addressing the failure to challenge our naive presumption that the market is a mechanism that will get us out of the pensions crisis, rather than take us into another one. I want to concentrate on those two final points.
	The question of who will save is inextricably linked to the issue of means-testing. We need to understand where we are, as a society and as an economy. The Institute for Public Policy Research has reported that 51 per cent. of those in low-income families have working parents. Some 2.5 million households need tax credits to give them a living wage. In addition, Britain is in the midst of our own credit and debt crisis. Last year, personal credit debt rose to £1.35 trillion. UK gross domestic product stands at £1.33 trillion. For the first time in our financial history, personal debt exceeds personal created wealth. That will present us with huge challenges in the year—and years—ahead.
	Grant Thornton accountants predict that in 2008 there will be an increase in insolvencies, with 120,000 in the coming year. That is 20 per cent. more than in 2006. They also say that excess spending on credit in the Christmas period will account for a third of the 28,000 personal insolvencies that they expect us to face in the next three months. Repossessions are currently running at 77 a day, and there were 14,000 in the first six months of last year, which is the highest rate since 1999. That was before Northern Rock and the global credit crunch kicked in.
	Mortgage bills have risen by 20 per cent. in the last two years, and in the coming year there will be 1.4 million households whose preferential periods of access to low-interest mortgage repayment starter periods will come to an end. They will almost certainly not get preferential treatment in the deal that follows. In addition, up to 4 million households are being forced back into fuel poverty as a result of ever-increasing fuel prices.
	Over the weekend, the Prime Minister warned:
	"This is one of the most difficult years for the world economy."
	If it will be difficult for the wealthy, it will be even harder for the poor. We will have to take a long, hard look at how we expect those who cannot afford to live to be in a position to afford to save. That is a practical, day-to-day issue, precisely as fuel poverty is: as we have expressed it, people are faced with a choice between heating and eating. The question is: how will those whom we wish to include in the new Pensions Bill schemes be able to afford it? We need to look at new mechanisms that address the question of affordability, and the most sensible starting point may well be tackling the current provision of £20 billion a year or more that we give in pension credits to the wealthiest in the land. If we have to dip into that money to provide access for the poor, that would be a genuinely progressive and relevant measure.
	The question of who pays is likely to be dwarfed, however, by the question of where the money goes. How short a set of memories we seem to have. In 2002, there was a pensions and investment crisis. In that year alone, £250 billion was wiped off the value of UK pension funds, because the deregulation of world financial markets resulted in pensions being increasingly drawn into short-term, speculative markets. When the bubble of those markets burst, inevitably what people thought were secure savings disappeared. We have not learned from that that there is an increasing incompatibility between short-term speculative markets and long-term, secure pension aspirations.
	If we doubled the amount of money that went into UK pension funds in 2002, we would simply have doubled our losses. To double them today using the same mechanisms would throw petrol on the fire. We cannot pretend that by introducing a new mechanism while shovelling the money in the same direction would do anything other than accelerate the drift into the next crisis. The global credit crunch has been driven by precisely the same mechanisms that took us into the crisis in 2002. Sadly, creative accounting is used extensively in the banking and investment world, and Northern Rock is just the tip of the iceberg. Commentators in the United States have tried to analyse what happened in the off-balance sheet accounting world, which has transformed international banking. They have calculated the impact of what is referred to as "toxic waste" in the banking industry—loans made upon insecure loans upon insecure loans. Using a mechanism outside accounting rules, the banks have created their own credit default swap clubs, in which they swap bad debts and spin them round the table to allow themselves to create more debt. The scale of that activity is estimated to be £45 trillion, or three times the size of the US economy.
	It is no wonder that while central banks, whether in the US, the UK or Europe, have intervened to create credit for the banking world, banks will still not lend to one another, because they know how shaky the foundations are. Throwing more money into that crazy pot will simply accelerate the drive into the next crisis. We have to move the rules about where money goes in a different direction. In 2003, I helped to write a pamphlet on people's pensions that looked at the ways in which the allocation of pension savings had changed in the past 50 or 60 years. I shall give the House just one set of figures. In 1962, 51 per cent. of the total pension fund assets in the UK were invested in UK Government bonds. Today, that figure stands at 9 per cent. Some 80 per cent. of pension fund contribution goes into private equities or corporate bonds, both of which have become increasingly short-term, speculative, mythical and, in some cases, illegal. The danger of throwing money in that direction is that it would simply accelerate the next crisis, which would be a repeat of the last one.
	We do not have to go down that path, and I should like to offer some suggestions to the Minister and the Secretary of State. Some 99 per cent. of share transactions trade in second-hand shares, and are decades away from the principal investment that built anything. They are just swap clubs for second-hand financial entities. If we genuinely want mechanisms that invite people to save, and if we want that saving to be a productive investment in their future security, we must direct those savings into investments in infrastructure, health, education, housing and environmental improvements and security. We could do so extremely easily. We contribute about £50 billion a year to personal pension schemes. If the Bill delivers the Secretary of State's expectations, it will add another £10 billion a year. If we used that money for infrastructure investments, we would not need a single private finance initiative scheme in the land. Last year, the Government received £3.6 billion in capital receipts for the privatisation of public services. Across the piece, we pay an average of 16.6 per cent. interest on PFI schemes, which is an absurd charge on the taxpayer for the next 30 to 50 years.
	If we paid half that rate of interest to bond holders, we could halve the rate of tax for taxpayers, and we would all be better off. Do we have the courage not only to include the poor in a comprehensive, 21st century pension package but to redirect how and where our savings are deployed? The Bill does not do so. It does not address the question of how the poor will participate, and it does not address the question of how those resources will be deployed productively, creatively and constructively to deliver long-term security for pensioners and society as a whole. If we fail to do so, we will end up passing a Bill that favours the City but not savers, which would be a tragedy for which the present generation and those who follow it would not forgive us.

John Greenway: It is a great pleasure to be able to speak in the House at all. In recent months, I have spent so much time in the Council of Europe Parliamentary Assembly that one of my new year's resolutions was to try and speak in the House more often. Tonight was the first available opportunity to do so, but this is an issue of which I have some knowledge as a result of my long association with the insurance industry and my chairmanship of the all-party insurance and financial services group since 1992—a long period, throughout which issues relating to pension reform have been high on the agenda, and have often been raised by the industry and pension groups.
	I wish to begin by telling the Minister that there is genuine good will among pension providers towards the initiative, and they want it to succeed. In the spirit of the contribution by my hon. Friend the Member for Epsom and Ewell (Chris Grayling), however, may I tell him that good will is not enough? We have to face the fact that the issue of pension reform has dogged successive Governments for 25 years, and it is critical that we learn the lessons of past mistakes. It is not yet clear whether all the lessons of past failures have been fully taken on board in the Bill. When the previous Secretary of State, the right hon. Member for Barrow and Furness (Mr. Hutton), announced just over a year ago, in December 2006, the Government's intention to proceed with the Turner proposals for personal accounts, I asked him two questions. First, who would be responsible for information, advice and explanatory literature under the regime? Secondly, what would be the impact on existing schemes of the new floor of 3 per cent. of contributions? It is absolutely clear from today's debate that the answers to both questions remain unclear, so I want to concentrate on them in my brief remarks.
	The issue of information and advice is crucial. People need to make properly informed judgments about how much to invest in their pensions, whether to invest at all, or whether, difficult though the Secretary of State has reminded us it will be, to opt out of auto-enrolment altogether.
	Much has been said in this debate about the impact of means-tested benefits, and that is undoubtedly important. However, there will be a deterrent if people think that saving is not worth the sacrifice. We must address the issue, and I hope that the Minister will have something more positive to say in his winding-up speech.
	We should be in no doubt that it is difficult to judge in advance whether low-paid employees should stay in the schemes, because there are so many unknown and imponderable factors. What will the contributions during a working life be worth come retirement age? How much income will those contributions then generate? What will annuity and interest rates be like? What will be the impact of inflation at that time? What type of annuity should people buy? Will employment experience and record over a long period enable an individual to build up a worthwhile investment record through their fund? Those questions are critically important, but the answers are extremely difficult to predict in this debate today.
	Not only the Government but Parliament and the country are in a Catch-22 situation on the issue of means-tested benefits. It is clear to me—and I think this was what the Secretary of State was trying to hint at in his robust exchange with my hon. Friend the Member for Epsom and Ewell—that unless people make provision for their retirement in much greater numbers, pressure to provide help through means-tested targeted benefits will remain. It will be there for all Governments. However, affordability will eventually be the issue. How much longer can we afford our expectations, given that there will be two employees per pensioner to fund everything on pay-as-you-go? Clearly, we will not be able to.
	In a sense, we should not be debating whether the existing structure of means-tested benefits will continue indefinitely but whether the principle and philosophy should be that people must realise that they should save for their own provision because there will be limits on what the state can provide in the future. That has nothing to do with whether one political side or the other wants to be more generous or has a greater feel for low-income pensioners' problems; it is the reality that we are beginning to face.
	When I first came to the House more than 20 years ago, I thought that that was the only issue. However, today we face what in principle is a good idea and scheme, but one that, if we are not careful, will be wrecked or undermined because of the expectation that the state will always provide in the end. The right hon. Member for Birkenhead (Mr. Field) was exactly right, and I shall come to his point in a moment. We have to address the issue before this Bill leaves the House. Unless people who invest in the personal accounts and choose not to opt out believe that they will be better off as a result, the provision will fail—for exactly the reasons given by the right hon. Member for Birkenhead. It is not rocket science. The Help the Aged briefing note makes clear a number of ways in which the issue could be resolved. I urge the Minister to take them on board.
	Past initiatives came unstuck when retrospective judgments rightly concluded that people took wrong actions. When those had been subject to advice, compensation had to be paid, at huge cost to the financial services industry. That means all of us—all of us contributed to that compensation in one way or other, if only through the reduction in the value of the residual funds of life insurance companies and pension funds.
	All that has induced a climate in which providers seek to avoid giving advice. Advice also adds to cost, which undermines return and value. The Government themselves were criticised by the parliamentary ombudsman for the misleading nature of Government leaflets on occupational pensions. The Secretary of State made a comment about sending messages, and that is precisely the point. The Conservative Government in office in the Parliament before I was elected, when I was working in the financial services and insurance industry, actively encouraged people to get out of occupational pensions and into personal pensions. Even the state said that portable pensions were the things to have. However, that turned out to be completely wrong and we are in danger of doing the same thing again.
	Ideally, advice should be available, but it is unlikely that it can be given on an individual basis in the current regulatory framework. The all-party group on insurance and financial services keenly awaits the outcome of the Thoresen review on generic financial advice. I am not as pessimistic as some of my hon. Friends, including my hon. Friend the Member for Epsom and Ewell; I think that Thoresen may provide a solution. We need to foster greater understanding of what people do with their pension investments, insurance products and so on. They should be absolutely clear, but for that the detail must be right.
	My hon. Friend made a point that concerns me. There is an opportunity for people, without advice, to put lump sums into personal accounts instead of, with advice, putting lump sums into other investments that may not be pension investments at all. That concerns me.
	I shall deal briefly with my next point, because my time is going. The Secretary of State said that most employers were unlikely to reduce existing contribution levels. I would like to share his optimism but, as the right hon. Member for Birkenhead clearly said, the future is less certain and if employers are under financial pressure, they may reduce them.
	However, my greater concern—and the point that I made in my intervention on the Secretary of State—is the continuing demise of defined-benefit provision. There may be reason to believe that the haemorrhage has been stemmed for the moment. However, the signs are crystal clear: remarkably few young workers in the private sector—our children—will enjoy a final salary or defined-benefit pension. That is an appalling shame, because such pensions were the bedrock of employment for the generation that preceded ours and our generation. What is the result? Comparisons with the public sector are already putting pressure on the retention of defined-benefit schemes, our parliamentary pensions included. In defined-benefit schemes, the employer takes all the risk; in defined-contribution schemes, the employee takes all the risk. There must be a middle way. The Association of Consulting Actuaries proposal may not be perfect, but I say to the Minister that the Bill is an opportunity for further reform. Conditional indexation works in Holland; I am about to get married to a lady from Holland, and I recommend all things Dutch to the Minister.
	Time does not allow me to address the many other issues. I agree with all that has been said about the group personal pension problem, which must be resolved. However, there is a lesson there as well. I believe that that problem is an unintended consequence of European Union rules on distance selling. Nobody thought that the rules would have that effect when they were approved in Statutory Instrument Committees. Similarly, we need to be clear that there will not be unintended consequences from the existing provision for the new personal accounts, the Personal Account Delivery Authority structure and the regulatory framework.
	If good intentions and an aspiration for consensus and progress were sufficient, we would not be in this position. We have one last chance to get this right, and if we fail this time, we fail a whole generation and beyond of future pensioners. As many colleagues who know me are aware, I am an optimist—a glass-half-full person, not a glass-half-empty person—but the half-empty glass needs to be filled in Committee; otherwise, I share the concern of the right hon. Member for Birkenhead that we could stare further failure on pensions firmly in the face, not now, but in a generation's time.

Anne Begg: Obviously the hon. Gentleman can see into the future far better than I can. We do not know what kind of Governments will come in, whether they will continue with any kind of means-testing or whether the pension credit will survive. We are looking up to 50 years into the future, not at the next 10 years or so. As we do not know what will happen, it must be right that we encourage young people to save as much as they possibly can today in order that the scenario that the hon. Gentleman describes does not happen in future.
	Whatever the system with regard to the state pension, if we are dependent on all pension provision in future being down to the state, means-testing will grow, not lessen. To ensure that means-testing develops a much narrower focus, we must encourage more and more people to invest in their pension today so that when it comes to retirement they will already have lifted themselves out of any kind of means-testing. People do not know what their employment record is going to be. Since the second world war, there have been huge changes in the working patterns of women. The Bill moves us ever closer to individual entitlements and away from the old dependency culture that existed under the married person's allowance and the basic state pension. Pension provision and the working lives of women and men have changed so much in the past 60 years that I foresee that in the next 10 or 20 years they will change a huge amount more. The basic message that we have to get over is that it is important that individuals who are working today continue to save in an occupational scheme so that they will have more than just what the state is able to provide through the basic state pension.
	It is important that we understand that this is about deferred wages. Many people have not opted into some of the very good occupational schemes even when they have not had to pay anything themselves. I remember speaking to one young man who had lost out on 10 per cent. of his wages because he had not got around to signing the form, although he was not even expected to add anything to his employer's contributions. Compulsory opt-in is very important in terms of getting over that inertia. We must ensure that there is auto-enrolment and that people do not have to make such decisions. We must also bear in mind low earners who have multiple jobs. As the hon. Member for Beverley and Holderness (Mr. Stuart) said, they are mostly women who have to find some way of increasing what they can contribute. I can understand why there is currently a contribution cap of £3,600—it is obviously because the Government do not want people who are sitting in fairly good schemes to move their contributions across into personal accounts, which are not aimed at that market. I hope that once the scheme beds down, the contributions cap can be lifted.
	The cost must be as low as possible. I would like it to be as low as three basis points. People say that 1 per cent. does not sound very much—it does not, but that was probably partly the death knell of the stakeholder pension. It is 1 per cent. not as a flat rate of contributions but 1 per cent. of the pension pot; once someone has built a big pot, 1 per cent. becomes a viable amount to be taking out of it every year. I hope that we can get it down to 0.5 per cent., but if possible it should be even lower. If the scheme is going to work, it is crucial that costs are kept as low as possible.
	I welcome the Bill. I am glad that there was generally consensus on its principles, although other areas will have to be worked through as it proceeds through this House and the other place.

Richard Burden: It is a pleasure to follow the hon. Member for Castle Point (Bob Spink). I had some difficulty in reconciling his plea to take the politics out of pensions with the content of his speech, especially the early part. Time prevents me from rising to most of his points about the Government's record. I simply say that, if he was present at the start of the debate, he would have heard my right hon. Friend the Secretary of State referring to our commitment to restore the link between pensions and earnings from 2012. He may also have heard the rumble of discontent that emanated from the other Benches. I heard one hon. Gentleman saying that the commitment would bankrupt the nation. If there is to be a shift in Tory policy, perhaps the hon. Gentleman should take account of it.
	The Bill represents the second stage of implementing the sort of proposals that emerged from the Turner review, and it has much to commend it. The problems, as many hon. Members have said, are stark: more than 7 million people do not save enough for their retirement, and only half those aged 35 or over and only one sixth of 20 to 24-year-olds are saving for a pension. The problem is most acute among low and medium earners.
	The Bill introduces several measures to tackle the problem, including reforming private pensions saving to ensure that qualifying workers are enrolled automatically into workplace pensions and providing for compulsory minimum employer contributions. There is much to commend both proposals, but I ask my hon. Friends on the Front Bench to take seriously some of the points that have been made, especially about the level of contribution. As my hon. Friend the Member for Aberdeen, South (Miss Begg) said, there may be a case for staging the amount, but it is important that we take seriously the point that my right hon. Friend the Member for Birkenhead (Mr. Field) made about not allowing a minimum to become a maximum.
	Although there is much to commend automatic enrolment, the relationship between that and means-testing is a genuine problem. There are no easy answers and anyone who pretends that there are has missed the point. In addressing the problem, I ask my hon. Friends on the Front Bench to consider a couple of matters. First, when the pension credit was introduced, its main thrust in the 1997-2001 Parliament was an incentive to save. Over time, it was merged with the minimum income guarantee, so that when people refer to the pension credit today, they tend to mean the lower rather than the upper element of it. There may be scope for reconsidering and perhaps rediscovering some of the early purposes of the pension credit to try to deal with the problems.
	Secondly, and perhaps more radically, I was struck by the point that my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) made when she rightly asked the Secretary of State to examine the position in Sweden and the value of good pension forecasts covering all elements of pension provision. The answer given was that, although there was something in her point, the pension structure in Sweden is different, and based much more on state provision. There are times when we should reassess the balance between state and private provision. Perhaps we can learn one or two things from the position in Scandinavia.
	I mainly want to concentrate on confidence. My right hon. Friend the Member for Birkenhead spoke graphically about the "walking newspapers" of the families of the 125,000 members of collapsed schemes. If their position had not been addressed, there would be a gaping hole in confidence in pension provision in this country. I want to add my thanks to Ministers for grasping the nettle. I especially thank the current ministerial team, but I want to say something about previous Work and Pensions Ministers—one of them, now the Minister for Competitiveness, has just sat down on the Front Bench—because although I, and doubtless others, crossed swords with them for many years about the need to do more, it is fair to acknowledge that they were trying to do what they could at the time. I therefore pay tribute to their efforts, but particular credit must go to the current ministerial team for grasping the nettle and concluding the years of campaigning just before Christmas.
	The matter says something about the way in which we achieve political change in this country. It was partly to do to Ministers and partly to do with colleagues in this place, who maintained the pressure, month in, month out and year in, year out; it was certainly to do with the unions, which kept up the pressure and the campaign from outside, and with the tireless campaigners outside this place. It is worth mentioning Ros Altmann and her campaigning. Her representations were not always comfortable, but she was tenacious and her commitment is unquestioned. Ros Altmann urged us for years to consider the position of the existing assets of the failed schemes and putting them to use. That became a vital part of the Young review.
	Most of all, we need to thank and pay tribute to the members of the collapsed schemes. Kalamazoo, one of the firms whose pension fund collapsed, is in my constituency. Members of that pension fund and those of other schemes, such as that of ASW, put in effort at which many of us can only marvel at a time when they were worried about not only their futures but security in retirement for their families. They kept up the pressure and refused to take no—or even maybe—for an answer. People such as Peter Wheeler and Brian Mealings, former Kalamazoo employees, were at the centre of the campaign from the word go. It is right to pay tribute to them.
	All the people whom I have mentioned played a role in bringing the issue to a conclusion. As I said, that says something about the way in which we achieve political change in this country.
	I welcome much of the Bill. Many hon. Members referred to the detail—doubtless, many issues will be considered further in Committee. The measure will provide a framework for stronger pension provision than we have had for some time. However, difficult decisions will still need to be made, not only about what is right but about the protections that will be needed—not tomorrow or next month, but in 20, 30 and perhaps 50 years. That will need to be combined with decisions about what is affordable.
	There are many issues to consider, but I want to refer briefly to Baroness Hollis's proposal in another place. The Government presented a powerful argument about the affordability of her proposal and whether it would achieve the intended aims. However, the problem of women's pensions remains. If the method of tackling it in Baroness Hollis's proposal is not correct—it may not be—it nevertheless remains unfinished business. I hope that, as the Bill proceeds, Ministers will revert to the issue and tackle it in the coming weeks and months.

Graham Stuart: It is a pleasure to take part in the debate and to follow the hon. Member for Birmingham, Northfield (Richard Burden).
	The debate is being held against a background of pension tax, which devastated and undermined what at least one Labour Member recognised as one of the strongest pension systems in Europe. As my hon. Friends have said, we have witnessed the calamitous loss of defined benefit pension schemes, partly as a consequence of such undermining. The hon. Member for Nottingham, South (Alan Simpson) powerfully showed that under this Government a massive escalation in personal debt has eclipsed the amount of national wealth created in a year. We must consider the Bill, which appears to be fair and on which a degree of consensus has been built up, against that backdrop.
	The Secretary of State tried to use the consensus, which is based on the need to encourage saving for the future because things are so uncertain in the future, like a hammer to oppose anyone who questioned him. The consensus is that those with the least in our society need to have a stake in society and security in old age, but that will not come from filling in long, complicated documents to obtain their council tax benefit, to pay their rent, to purchase food or to buy a present for their grandchildren. That is the current situation, when 1.5 million or more pensioners who are eligible for benefits do not claim them for reasons that hon. Members on both sides of the House decry.
	When the Minister for Pensions Reform winds up the debate, I ask him not to suggest that anyone who thinks that there are problems with the specifics of how the Bill will work is engaged in political point-scoring, which is the last thing that anyone wants to do. I am certain that my hon. Friend the Member for Epsom and Ewell (Chris Grayling) did not seek to do that in his measured, solid and serious contribution to the debate, which, sadly, followed a weak effort, which would have been hilarious if the issue were not so serious, by the Secretary of State. The Secretary of State's contribution was poor.

Nick Palmer: That is right, which is one of the arguments for the opt-in. We believe that there is a logical and serious case, which many people for whatever reason do not take on board, so it is reasonable to make it the default position that they become part of the national pension scheme, rather than staying outside because of misplaced or other fears and just hoping for the best. However, as I was saying before the hon. Gentleman's intervention, we need to do what we can to reassure people on those points.
	The second issue that I should like to raise is employer evasion. We are making the scheme compulsory for employers, but we are all aware that some employers will, for good or less good reasons, seek to minimise the number of employees for whom they pay a 3 per cent. contribution. As I mentioned in an intervention on the Secretary of State, it seems reasonable to ask in Committee why employers are being given a financial incentive to encourage their employees to opt out. Why should not every employee be part of the national scheme? The optional element would be paying the 4 per cent. and receiving the 1 per cent. tax rebate; the 3 per cent. would be paid by employers regardless. From the employers' point of view, the issue would be entirely neutral. They would not be concerned about whether or not people signed up—that would be a matter for the people concerned—and there would be no risk of the "wink and nudge" influencing people. I agree with the hon. Member for Beverley and Holderness (Mr. Stuart): employers will have a sheaf of forms to offer employees asking them whether they want to be part of the scheme, and the less good employers will nudge them in a way that is impossible to prove or to catch.
	I am pleased, as I know my trade union colleagues will be, that agency workers are covered by the proposals in what I consider quite an elegant way, but there remains the problem of self-employed workers. We all know of the increasing tendency for some companies to farm out important elements of their operations to people who are at least nominally self-employed, and we do not want to reinforce that tendency by giving an additional incentive for the establishment of such arrangements. However, it would be helpful if there were ways of bringing self-employed people into the scheme.
	My hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) referred to the Swedish "yellow envelope" scheme. In today's debate, we have still subliminally accepted the traditional model according to which people spend most of their lives working for one employer, but that is now very much the exception. The norm is that during their lives people work for a number of employers, perhaps a dozen or more, experiencing voluntary or involuntary interruptions in their employment. In such circumstances, it is easy for people to lose track of their pension rights. The attraction of the Swedish scheme, as I understand it, is that people receive annual statements providing an overview of their position.
	I appreciate the Secretary of State's point that in the absence of a defined-benefit scheme it is not possible to tell people that, in the present circumstances, they will receive X pounds a week. However, they can be told "Here is an overview of what we have on record for the pension schemes to which you have contributed so far, and a statement of the current assumptions of what that could lead to", with all the usual provisos issued by pensions firms; only the Government, or a Government-appointed agency, could do that.
	It would be a real, visible, concrete service to British citizens if, as part of the package of being British, they received a statement from the British Government every year telling them where they stood in terms of pension provision. I think that it would stimulate saving without imposing an administrative burden on pension funds. They have to collect the information anyway; it is just a matter of passing it on. I believe that this is something we could do to help people make sense of the complex world of personal finance—which, up to now, many have struggled to do.

Steve Webb: I shall focus on just one issue in my brief speech. I shall return to where the Secretary of State began—the issue of women's pensions, which has been touched on throughout the debate.
	I want to be helpful to the Government for two reasons. I thank the Secretary of State and, through him, his officials for the constructive dialogue in which I have been able to engage with him in recent months on a range of matters related to women's pensions, and for the efforts that he is now making to help resolve some of the technical problems connected with home responsibilities protection. I thank him and his officials for their constructive approach.
	However, he has, with due deference to the noble lady, what might be called the Baroness Hollis problem. Last summer, the Government were defeated in another place in the attempt to do something about the 2010 pension changes and the issue of women who retire before 2010 on a much less generous state pension regime. Baroness Hollis came up with one suggestion that the Government said they would do something about. They looked at it and have said that they will not do something about it. I want to offer the Government a way out and to offer my solution to the Baroness Hollis problem. I do so in a constructive spirit and, as the Minister knows, I will be happy to speak to him at great length about it if he wants.
	After the announcement in the Lords that no progress was going to be made on the issue, Jackie Ashley wrote a column in  The Guardian on Christmas eve describing what a problem this was. As I had nothing else to do on Christmas eve, I wrote to  The Guardian and my letter was published a few days later. I pointed out that there were a set of women with gaps in their national insurance record who could do something about it now if only they knew about it. Interestingly, I read  The Guardian letters column a few days later and found that a citizens advice bureau manager had written to say that I was right—it was a good letter, obviously. She said that even she had no idea that people could fill their national insurance record gaps on those special terms because the system was so complicated.
	Baroness Hollis is trying to address the problem arising from the fact that many women are approaching, or have passed, pension age, have gaps in the national insurance record and could fill them, but have not done so. We need to use the existing mechanisms to enable women to fill those gaps.
	As the Secretary of State said at the start of the debate, women—we are principally talking about women—can fill up to 12 years of contributions' gaps now. We are in 2008, and one can pay back for any of the last six years, which takes us back to 2002. Between 1996 and 2002, there was a different mess; the Government were not telling people about such gaps in the national insurance record. To make up for that mess, there is a special scheme that allows people to pay back from 1996 to 2002. The problem is that lots of people do not know about it. I have set myself the goal of trying to find them individually. This might be slightly adventurous and I would like to enlist the Minister's help in the process. I have found a few so far, but there are a few still to go.
	My serious point is this: the Government hold records on everybody's national insurance, so they hold records on all of those women who have gaps in their records for the years for which the special scheme applies and since then. If those women knew that they were entitled to fill the gaps in their record on these very favourable terms, many would do so. I have found dozens of such women who, when we have told them about the scheme, have found they could get, literally, free money. They have found out that they could pay a couple of thousand pounds in back contributions and earn £3,000, £4,000 or £5,000 in back pension. The scheme is so generous that the Government do not even ask them for the money and simply pay the difference.
	I have had the pleasure of ringing up women the length and breadth of Britain—I have had several proposals of marriage—and helping them to discover that they could have free cash and a bigger pension. The problem is that the Government know exactly who they all are. They never told one set of women and they told another set but only once, several years ago, and in a somewhat complicated way. All those women have that latent entitlement that they are not taking up.
	The Baroness Hollis problem—the problem of lots of women with incomplete records who could fill them—could be made much better if the Government were to access their own records proactively and contact the women who are missing out.
	Very briefly I shall identify the two groups about whom I am most concerned. The first are the women who did not get a letter from the Government telling them about gaps in their record. Such women are perhaps atypical now but are typical of a generation of women who left school at 15, worked full-time and paid some national insurance, left work to have children, went back for a period and paid the married woman's stamp, but maybe stopped altogether when they had other children. They might work in Oxfam, or they might care for an elderly relative. Basically, their working lives stopped in 1980. In other words, they have a dirty great gap in their contribution record.
	A few years ago, the Government took the view that they would not tell these women that they were entitled to fill the gaps in their record on very favourable terms. The scheme is brilliant and the Government know all the women who are entitled to it, but they chose not tell them; they did not write to them. This set of women could benefit if the Government used their own information to tell them. I am not asking for legislative change. All the information and powers are there and the Government just need to tell the women. Even if the Government were simply to prioritise those who have most to benefit from the scheme, that could help a lot of the women whom Baroness Hollis is concerned about to get better pensions.
	The second group is the women the Government did write to in 2004-05. Some of them responded, but, even on the Government's own figures, tens of thousands have still yet to respond. There is a ticking time-bomb in that there is a deadline, as the Minister well knows; the scheme will run out by 2009 or 2010. There are lots of women out there who could take advantage of it. I find them practically every day—the Minister looks mildly sceptical, but I can give him names and addresses. Practically every day I find another woman who could take advantage of the scheme and who received the initial letter and either did not understand it or, crucially, received it at a time when it was not right for them to respond. They might have been 60 when they received it and they did not have the £2,000 but they are now 64 and it is worth their while to respond, as they will get the offset and they will end up in cash. So it was right for them not to respond when they received the letter, but I would bet any money that they binned the letter because they thought, "I haven't got thousands of pounds," instead of putting it in an envelope marked, "Open again in 2008 when it is worth while." The Government know who those people are.
	There are a lot of women of the type whom the noble Baroness is rightly concerned about—as is the Minister, and as am I—and whom the Government could help without a massive spending commitment. Of course, some money would be involved.

Steve Webb: I had better not, as I am pressed for time. The critical point is that the Government know who those people are. They have their own records. Even if they only identify those who could most benefit from the existing schemes, they would do a huge amount to address the concern that is felt in all parts of the House about women who have incomplete records, often because they have done something that was very worth while which has not been reflected in their pension benefit.

Sally Keeble: I also want to pay tribute to Front-Bench Members for their outstanding work in tackling pensioner poverty, and in particular in dealing with issues to do with women's pensions. My hon. Friend the Member for Grantham and Stamford (Mr. Davies) said to me earlier that there are many men in the low-income pensioners pot as well, which is of course right, but the figures show that the pensioners who are in poverty and who particularly miss out are overwhelmingly women.
	The Government have done two particular things to help them. One is the much-reviled means-tested benefits, especially pension credit and the minimum income guarantee; many of those payments have gone to women pensioners and have been responsible for lifting them out of poverty. The other was to commission the Turner report, which produced excellent proposals on women's pensions. It highlighted two issues. First, it identified that one of the main reasons why women pensioners were poor was that they were not qualified for the state pension. In the last round of legislation, that was addressed by reducing the number of years needed to qualify. In addition, there is, of course, the changing demographic profile and the change in women's status which means that more of us now work for longer. As a result, by 2025 more than 90 per cent. of us will be entitled to a full state pension. That is a major plank in getting women pensioners out of poverty.
	The second particular cause of pensioner poverty for women that the Turner report identified was the fact that many women do not have pensions linked to their work—in the past, the term for that was occupational pensions. The Bill is particularly important as it will bring in the mechanism that will give women—especially those on low incomes—pensions that are linked to their work. That obviously raises a lot of issues, which I want to discuss. It will impact on their ability to get means-tested benefits, which have kept up women's income in retirement. However, it is right that we say that there will have to be a fundamental shift in pension provision such that people start to save even if they are on a low income. That will mean that people will have to start looking at saving, which will be the ultimate way in which they will achieve security in retirement.
	Members have talked about incentives to save, and as I know from personal experience, the best incentive is to say to people, "You put so much in the kitty and your employer will have to put in so much, and the Government will put in so much." That is a basic incentive to save. I speak as one of those women who missed out on their state pension, for all the reasons that the hon. Member for Northavon (Steve Webb) identified.
	I want to touch briefly on three of the various issues relating to personal accounts, which I hope Ministers will look at. It is important that personal accounts work for people on low incomes who have never saved for their retirement before, particularly women. I understand from looking at the figures that people will get the full benefit of personal accounts only if they have their basic entitlement to a state pension; it is not a requirement—it is just the way that the figures work out. That is why it is particularly important that in paving the way for this provision, we ensure that pensioners can buy back missing years. I take the point made by the hon. Member for Northavon about the schemes that are open; when people get such letters—I get them—they think, "I'll worry about that later." It is important that the issue be dealt with so that women can buy back the missing years from the early years of their employment, which are often the years that they miss. They also need to be able to buy back enough of the years to ensure that, if they have the means, if it suits them and if they think it the right thing to do, they get the full state pension. I will not go into the figures in detail now because my time is limited.
	Secondly, the provision must work for women who have more than one job. Women in my constituency who have always worked and have a record of being in paid employment will often make up their income package through a basket of different jobs, all of them quite small and some of them not very well paid. It is particularly important that those women also get the full benefits of the personal accounts, which perhaps means some tweaking of the requirements.
	Thirdly, perhaps women should be able to vary the amounts that they pay into personal accounts, so that they can buy back years when they were unable to pay in as much. Women's employment goes in peaks and troughs—often troughs. When one occasionally hits the grassy uplands of having some money, it is very important to be able to make provision for one's retirement, particularly given that, as we know from research, women, when there is choice between their pension and their children, have a tendency to ensure that their children get the money. We therefore need to ensure that the patterns of how women save and work are properly reflected in the structure of the personal accounts. It is particularly important that these accounts perform the miracle of getting people who do not have a track record of saving to save not for a rainy day, for a holiday or for their children, but for their retirement.
	We must also make sure that while this is going on, other elements of what the Government are doing do not damage women's pensions. Let me give an example. A constituent came to see me—she is between 60 and 65 and her husband is over 65—to explain that the tax on her quite measly pensions is doubling. She is losing the 10p starting rate, which is going up, and she will not get the benefit of the increased personal tax allowance for pensioners. So whereas this year she is paying, as it says in a letter that I wrote to the Treasury, a total of £132 in tax, next year she will pay £261.40 on her pension income of £6,545.20.
	I ask that while we do all this good stuff through the Department for Work and Pensions and this legislation to bolster women's savings, we ensure that other bits of Government policy do not penalise women because of differences in retirement age and such like. It is not enough to say that the husband gets the benefit, because the argument about women's pensions is about poverty and equity. Women expect to be treated as individuals when they have retired as well as when they are employed. With those caveats, I welcome the Bill. I hope that we can fine-tune those small bits in Committee to make it work for women.

Quentin Davies: I shall start with the Opposition, because we had a truly characteristic and classic performance from their Front Bench this afternoon. We heard a lot of vituperation and aggressive epithets, but no policies, no ideas, no commitment and no sense of conviction. I shall give some concrete examples.
	We all know that means-testing is a problem and poses potential difficulties, but should we have it or not? We heard a litany of complaints about means-testing, but no indication of whether the Conservatives would abolish means-testing or increase its use. We all know that generic advice is not ideal and it would be splendid if we could pay for everybody to have customised advice. The Opposition complained about the generic advice proposals in the Bill, but they did not say whether they thought that the taxpayer should pay— [ Interruption. ] They do not like being criticised, but they must understand that they will be. I see that the Opposition Chief Whip is now to be my audience on behalf of the Opposition. We never heard what their view is on generic advice. Would they prefer the Bill to provide for customised advice? In that case, who would pay for it? We did not hear that. Or do they want no advice at all? I presume that that is not the case.
	Another example is automatic enrolment, about which we heard much from the Opposition spokesman. He mentioned it over and over again and appeared to be totally against it, but he never said that he would table an amendment to remove it from the Bill. There was a complete abdication and a void where we should have heard some solid and concrete proposals from the Opposition if they want to be taken seriously. It is no use just complaining about things or saying that life is not perfect. We all know that life is not perfect. Compromises have to be made and decisions taken. If one wants to be in government, one has to be prepared to face decisions and come down on one side or the other. We had none of that.
	By contrast, the Government deserve to be congratulated on the Bill. It is a historic Bill. It is the first time in our history that we will have a contributory pension scheme that covers the whole work force, every man and woman who is working, unless they specifically opt out. That is a special moment in the history of pensions in this country. It means that everybody who is working will have a stake through the contributory pension system and the equity market in the prosperity of this country. Indeed, through the international equity market and diversification, they will have a stake in the future wealth of the world, and that is enormously important.
	In another important achievement, the Government have succeeded in doing something that no other Government have even attempted, which is to provide for compulsory employer contributions. What is more, the Government have managed to do so through negotiation, and that is a fine achievement. Many people would not have put the Government's chances of success very high, but they have succeeded. It is against that background that I wish to make one or two points on issues that are left open by the Bill.
	We all agree that there is a problem with means-testing. Some people should not contribute under the scheme because they would be better off relying on means-tested benefits. But the important point is that they are in the minority. It would not be sensible to throw the baby out with the bathwater and say that because that minority will not benefit we should deprive the majority of these new, positive measures. It is however right that some flexibility should be provided, and the Government have done so in allowing people to opt out and through the provision, which the House has so far rather missed in the Bill, for trivial commutation. However, the amount is not actually trivial; it is £16,000.
	To take a concrete example: at 8 per cent. the total contribution of someone on £20,000 will be £1,600 a year, so it would take 10 years of cash contributions to reach £16,000. Making a reasonable assumption about the normal market return of those contributions, and as compound interest is rather low at the beginning of a contributory scheme, it would be about eight years before there was any danger of someone losing contributions at all now that the Government have provided for a so-called trivial commutation level of £16,000. That gives people a long time to think again in the light of changing personal circumstances or different rules about means-testing or pension contributions.
	Finally, I should like to express something that the Government may not be able to say so easily. I have no idea what is in their mind on the matter and no idea of the substance of their discussions with the CBI and employers organisations, but it seems to me highly desirable, and natural over time, that the 3 per cent. compulsory contribution by employers should increase. The Australian superannuation system is interesting. It started at less than 3 per cent.—it may have been only 2 per cent.—but has risen to 9 per cent. over many years; there has been only a slight increase in the burden each year so that it could be absorbed. The House will see immediately that in so far as the compulsory and global contributions increase from a total of 8 per cent. at present to 10, 12 or 15 per cent., we will reach a point when not only will the proceeds of the sums invested through the contributory scheme in terms of an annuity available on retirement be much more significant than at present, which is highly desirable from all obvious points of view, but also the means-tested problem will have been relatively eroded over time. Fewer people will find themselves in the perverse situation of having no incentive to contribute to the scheme.
	It would of course be highly desirable if the Government could make sure that in future there will be no increase in means-testing, as that would go against the whole logic of the scheme. I congratulate them on a major move forward in that regard, for which they received little credit in the debate—deciding to restore the link between earnings and the contributory national insurance pension. That is an anti-means-testing measure and will enable people to improve their pension income globally without it being negated by the loss of pensions elsewhere through the means-tested system.

Hywel Williams: We welcome the Bill, albeit with some reservations. Many of us have long awaited consensus on pension provision after the difficulties and complications of the past 25 years, beginning with the Thatcher Government's disastrous decisions about the state earnings-related pension scheme and the breaking of the link between pensions and earnings.
	In the interim, pension provision, particularly for the least well-off, has too often been characterised by confusion, missed opportunities, mis-selling and sharp practice or, disastrously, no provision at all for many people, including many of the self-employed, some of whom are my constituents. That has left pensioners with a well-founded sense of grievance.
	Unfortunately, public trust in pensions in general has been undermined, which is reflected in the growth of forms of investment that are obviously less safe. Recently, I was ill for a week and watched some daytime television. I was amazed and dismayed by the property programmes, because so many people thought that investment in what looked like extremely dodgy foreign property would be a more desirable nest-egg than investing in a pension.
	The Bill has particular relevance for Wales and Scotland. In Wales, we have proportionately more pensioners and lower pensioner incomes, and there is significant under-claiming of means-tested benefits. Twenty-two per cent. of Welsh people are over 60 and the number is projected to rise to 29 per cent. in 20 years' time. Many of those people will be very elderly and, as we know, elderly people have smaller incomes.
	Pensioner incomes in Wales and Scotland are lower than those for the UK as a whole. Let me give some figures for the past three years. The net income per week for pensioner couples is £338 in Wales, £347 in Scotland, £365 in the UK and, interestingly, £445 in south-east England. Single pensioners' net weekly income is £164 in Wales, £170 in Scotland, £171 in the UK as a whole and £189 in outer London. Obviously, we would welcome any steps towards improving pension provision, particularly for the less well-off. I have not even taken account of lifespan issues, which are particularly relevant.
	I am glad to say that there has been great progress in reducing poverty in Wales in the past 10 to 15 years, not only in income terms, but through measures such as free bus travel for pensioners and free prescriptions for all. In 1995, a quarter of low-income households in Wales were pensioner households; now it is a fifth. The figure is down from 25 per cent. to 20 per cent., which is welcome. However, 150,000 pensioners in Wales are still in poverty. Significantly, 30,000 of them would be lifted out of poverty if they took up in full the means-tested benefits to which they are entitled. I shall make a general comment, as the Secretary of State for Work and Pensions is also the Secretary of State for Wales: given that the Government are irrevocably wedded to means-tested benefits, I would welcome a vigorous take-up campaign to make sure that pensioners take up the money to which they have a right.
	Hon. Members will have heard the Minister for Pensions Reform assert in Question Time that the start date will not slip from 2012. I hope that he will not regret those words at his leisure. I also hope that he will reassure the House that employers will not see the Bill as an opportunity to establish a ceiling, rather than a floor—a point that other hon. Members made, too.
	I now turn to my main concern, which is the relationship between existing provisions, particularly means-tested benefits, savings and other pension provisions. That relationship can seem fiercely complicated to many people, and that leads to confusion, badly uninformed decision making and subsequent potential loss of income. The advent of personal accounts may complicate matters in the minds of some people. There must be careful consideration of the relationship between personal accounts and means-tested benefits, not least, as has been said, to make sure that it pays to save.
	Many years ago, I was involved in advising claimants. Some hon. Members will remember the infamous "better-off" calculations that we used to do, to determine whether people were better off on unemployment benefits or family credit, as it was then called. The calculations were fairly complicated for benefit advisers, but for ordinary claimants they had the character of one of the lesser branches of mediaeval theology; people just did not understand. I repeat the plea for the wide availability of good-quality information. Advice must be available, and not just from the Personal Accounts Delivery Authority. As the Minister will know, Age Concern is pressing for that, as are other bodies. People will need detailed, clear, face-to-face advice, if that is possible. It is expensive, but we are talking about people's income for the far future. The advice should cover all provision, including savings, and not just personal accounts.
	Lastly, I have two points of a more local and domestic nature. I shall take this opportunity to make my traditional demand that all the information and advice services in Wales be made available in Welsh and English, particularly given the linguistic preferences of many of my constituents, and the linguistic preferences and abilities of some older people in Wales. I urge the Government to liaise with the Welsh Language Board on those matters at an early stage. Finally and happily, I am sure that the Minister will welcome the announcement at the weekend of the appointment of Ruth Marks as Commissioner for Older People in Wales—the very first such commissioner in the world, as far as I know. The commissioner is appointed specifically to work on the remit of the National Assembly for Wales. However, I hope that the Government will assure us that they in London will not raise artificial barriers, but will work closely with the Assembly and the commissioner on matters to do with older people.

Harry Cohen: This is a genuine attempt by the Government to tackle the serious problem of under-saving, too few contributors and insufficient contributions. Some 7 million people have not saved enough for their retirement. Half of them are over 35, and only a sixth of 20 to 24-year-olds are saving for retirement. Only 40 per cent. of people earning between £5,000 and £30,000 a year are saving towards their pension, so there is a serious problem.
	In the short time available, I shall make some brief points. First, contributions are too low. Turner said that contributions of 8 per cent. would bring about a 45 per cent. replacement rate—someone's pension level, compared with what they earned—which is a long way from the figure of two-thirds that most people regard as acceptable. I think that the figure will be much lower, because someone who has not saved enough at 30 will not get anywhere near 45 per cent. There will be much less for people who have undergone periods of unemployment. The figure depends on unspecified stock exchange gains and on administrative charges being kept down. That might not happen, so it is likely that employers' contributions will have to be increased. The state may have to target measures on low-paid and older workers. Tax relief of 1 per cent. may not be enough, especially for the low-paid.
	Those on low incomes are of most concern to me. They may not benefit as they should—in some cases, not at all—from the personal accounts system. People may be ineligible because they are too poorly paid and have multiple jobs. The way in which the system has been set up is wrong. Individuals who are over the lower limit—perhaps they have two jobs—will not receive money from their employers to match their contributions, which is not reasonable. A great deal has been said about the issue of older women, who have sought entitlement to a higher basic state pension. It is not right that the Government should cut their options and not provide that higher basic state pension. I hope that the Government will make a commitment to return with proposals to help those women increase their pension entitlement.
	The relationship with the means test is important. There are two splendid articles by experts in the current edition of  Parliamentary Brief. May I say to Ministers loud and clear that saving must be worth while for low-paid individuals who contribute to personal accounts? It is not right that they should be caught up in the means-testing problem and end up with nothing. I urge Ministers and the Secretary of State to look at the issue to ensure that they get something. Hopefully, the Bill can be changed in Committee or afterwards. I agree with the point that my hon. Friend the Member for Luton, North (Kelvin Hopkins) made about higher-rate taxpayers. The Bill provides for the overall reform of pensions, and for them to be left out so that they can carry on receiving their £21 billion or whatever—the figure is the in tens of billions—is not right. The overall reform package should be skewed towards low earners so that, to coin a phrase, we end up with pensions and pension tax relief for the many, rather than the few.
	The Bill is a laudable effort, but significant reform was required, not just because of the crisis in savings for retirement but because of the other side of the balance sheet. We are going to raise the state pension age, which will go up to 66 in 2024; to 67, 10 years later; and to 68, 10 years after that. Those changes might not have consensus anyway, but they certainly will not if the other side of the reform package is not generous enough. Again, I urge Ministers on the issue. There are still issues of differences in life expectancy and health inequalities, especially for the lower socio-economic groups, and they must be addressed. I am concerned that the raising of the state pension age will affect the poor the most; one independent organisation said that it would be immoral to force the poorer sections of the population to wait longer for their state pensions just to save those who are richer some tax. As I said, the reform needs to be much more substantial for the socio-economic groups at the bottom of the ladder.

Nigel Waterson: It is always a pleasure to follow the hon. Member for Leyton and Wanstead (Harry Cohen), who always speaks with total conviction on these matters. This has been a wide-ranging debate and I thank all hon. Members on both sides of the House who have taken part.
	As we enter a new year, we see that the Government have learned nothing new. The age of spin is still alive and well. In his press release about the Bill, issued this morning, the Secretary of State seemed to be in total denial about the real and current problems in pensions. In it, he talked about the
	"nightmare of a future pensions crisis".
	Does he not know that the crisis is here and now, and has been for some time? Does he not realise that savings in this country are at their lowest since the 1960s—a point touched on by the hon. Member for Nottingham, South (Alan Simpson)? Does he not remember that just before Christmas he and his colleagues were finally forced into a humiliating U-turn over the 130,000 pensions victims? I do, however, join my hon. Friend the Member for Epsom and Ewell (Chris Grayling) in paying tribute to the Secretary of State's role in persuading the forces of darkness in the Government to relent on the issue.
	Does the Secretary of State not know that nearly 2 million pensioners are living in poverty and that the worst-off pensioners are getting poorer in real terms? He has talked about restoring the earnings link for the basic state pension, but he still will not tell us when that is going to happen— [Interruption.] If the Secretary of State wants to intervene, I shall be happy to give way. He talks about taking action, but his Government have been in power for 10 long years, having presided over the pensions crisis and been responsible in some measure for it.
	In his press release, the Secretary of State also holds to the line that personal accounts will come into effect from 2012. Is he really still in a position to make that remark in the light of the comments of the new chief executive of the Personal Accounts Delivery Authority on Radio 4? When that point was put to the Minister for Pensions Reform, he was good enough to say that he had told the chief executive in no uncertain fashion that he, the chief executive, would introduce them in 2012. That is the equivalent of the military saying, "Take this objective or do not come back alive." It would be interesting to hear in the Minister's winding-up speech what response he got from the new chief executive.
	We shall have more to say in Committee on the role of PADA, the principles that should drive it and the criteria for its success. Simply to increase the number of savers without substantially increasing the overall amount of savings in this country would clearly constitute failure— [Interruption.] I welcome a former and distinguished pensions Minister, now the Minister for Energy, to our debate.
	One of our main concerns is about so-called levelling down, which was mentioned by the hon. Member for Aberdeen, South (Miss Begg) and my hon. Friend the Member for Castle Point (Bob Spink). Let me be clear about where we stand on the issue. We do not wish to see anything in this legislation that might give extra encouragement to an employer already making more generous contributions than those envisaged in personal accounts to close an existing scheme. PADA must focus on its target group—predominantly those on low incomes with no or inadequate pension savings. That is a real concern, not one dreamt up by the Opposition.
	The Pensions Policy Institute has set out various scenarios in a recent report, rather snappily entitled "Will Personal Accounts increase pensions saving?" One of the models that it comes up with is very sobering, but it considers a range of possible scenarios, the most pessimistic of which could result in there being only 4 million to 5 million new savers in work-based pension schemes. It notes that there is a lot of uncertainty about how employers will respond to the reforms, and goes on to say:
	"This poses the question of whether the reforms would be considered successful if they did not increase annual total pension contributions but did increase the number of people saving and made the distribution of saving more equal."
	Soberingly, under its pessimistic scenario, the overall size of pension saving would shrink, despite a healthy amount of personal accounts, because of the levelling-down effect on existing provision. Ministers need to think long and hard about how we do what we can to ensure that that scenario does not come to pass.
	After five years of a rearguard action, the Government have finally agreed that the 130,000 pension victims should get proper compensation. Ministers seem to think that they deserve three cheers for that, but it has taken far too long to face up to doing the decent thing. Let me remind the House that in the meantime some of the victims have died, others have had to work beyond normal retirement age, sometimes with serious medical conditions, and all have faced the prospect of penury.

Nigel Waterson: I am happy to accept that form of words, because it summarises what I have been trying to say and what my hon. Friend the Member for Epsom and Ewell said in opening the debate.
	There is nothing about those victims in the Bill as it stands. It could have been in the previous Bill if hon. Members had voted for our lifeboat amendments or had been given the chance to include it by the Government. However, we will consign that to history. What we want to know now is when the relevant amendments to the current Bill will be tabled. Provided that the small print delivers what Ministers have promised, we can assure them that that part of the Bill, at least, will have our enthusiastic support. Prior to last year's election that never was, my party promised that if we won that election we would ensure that payments reached the victims within three months of our taking office. Can the Minister confirm that these payments will be made as soon as possible, and certainly within that time scale?
	We welcome the parts of the Bill that tackle deregulation or simplification—they will have our broad support, as we have already made plain. However, the plain fact is that the future of traditional defined-benefit schemes is hanging in the balance—a point well made by my hon. Friend the Member for Ryedale (Mr. Greenway). This may be the last chance to remove as many as possible of the disincentives to good employers who want to keep those schemes open in the future. We think, with respect, that Ministers are being too timid, and we shall table amendments that have the support of organisations such as the Association of Consulting Actuaries so that we can take matters further. I hope that Ministers will give those amendments serious and sober consideration.
	The main reason why we will not support the Bill in the Lobby tonight is that Ministers are still clearly in total denial about the potentially damaging effects of means-testing—an issue touched on by the right hon. Member for Birkenhead and others. At least the Secretary of State, judging by his press release, now accepts what he calls the "downsides", but how can he say that those downsides
	"far outweigh the small risk of saving and later regretting it"?
	I am sorry, but I do not agree with the hon. Member for Broxtowe (Dr. Palmer), who talked about a safety net and means-testing simply being there in case something goes horribly wrong. We are talking about means-testing that is already affecting nearly half of people as they retire. The Pensions Policy Institute and others have set out some genuine concerns that go to the very heart of these proposals, but the Government are the only organisation in a position to model the likely effects and to come up with detailed proposals to avoid disaster. All Ministers seem to be able to do is come up with bland assertions that it will be all right on the night. They are sitting on their hands and hoping that the problem will go away.
	The situation is worse than that. In recent weeks, Ministers have tried to shut down any debate on the issue. They have tried to bully the Opposition and even third parties into silence on this crucial point. It has been put like this: the Tories are letting the side down and making party political points for the sake of it, whereas what matters is the majority of people who should be better off with personal accounts.  [ Interruption. ] I have that more or less right, I think, judging by the reaction on the Government Benches. However, that is simply not good enough. If Ministers wish for consensus only on their own terms, they have come to the wrong shop. We are interested in consensus only if our concerns and those of other people are listened to and taken seriously. That point was also taken up by the hon. Member for Inverness and other places, all of which seem to have a distillery—the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander).
	If consensus merely delivers ill-thought-out and poorly designed solutions to the pensions crisis, it is a force for ill and not for good. In its usual painstaking way, the Pensions Policy Institute has identified at-risk groups—people who will be no better off and may be worse off if they are auto-enrolled into personal accounts. However, the institute cannot tell us how many people are likely to be affected. The Government could tell us if they wanted to. They have the model, the manpower and the means. However, they seem to be doing nothing. That issue was touched on, I think, by the hon. Member for Birmingham, Northfield (Richard Burden).
	Can the Minister for Pensions Reform tell us what modelling, if any, his Department has done, is doing and intends to do on this subject? How many people does he think are likely to be in the at risk groups—thousands, hundreds of thousands or even millions? Surely he has some idea. His answer may be that he and those advising him have not given it much thought, but I must tell him that the issue will not go away. That point was made by my hon. Friend the Member for Beverley and Holderness (Mr. Stuart). The subject will be written about by journalists, raised by financial advisers and used by unscrupulous employers who wish to induce their employees to opt out. I can assure the Minister that the official Opposition will not let it drop—not because we wish to make life gratuitously difficult for Ministers, but because we are genuinely concerned, as are many interested third party organisations, that the problem, if it is not addressed, will undermine the success of personal accounts.

Angus MacNeil: Are not we in danger of setting up a monopoly with the Personal Accounts Delivery Authority? If contributors find a better product elsewhere, how easy will it be for them to transfer? Will they be stuck with the monopoly that has been established?

Mike O'Brien: The Personal Accounts Delivery Authority is there for development. The hon. Member for Epsom and Ewell (Chris Grayling) was wrong about it. The PADA will not become the organisation that delivers personal accounts. That will be done by the personal accounts board, which is a follow-on organisation.  [Interruption.] The hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) is signalling—I have no idea what about, so perhaps he had better intervene again.

Chris Grayling: The Minister obviously did not hear me correctly because I referred to the delivery authority and its successor body. Will he assure the House that there will be a constructive debate in Committee on the amount of prescription that should appear on the face of the Bill about the remit of the two bodies to ensure that there is no mission creep in the years ahead?

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Laurence Robertson: My hon. Friend is right. The main thing that most of my constituents want is for lessons to be learnt. They accept that we live on a floodplain and that we often see water on the fields, but they do not accept that things need be quite as bad as they were. We must learn those lessons.
	As people work towards returning to their homes, their great fear is that the floods could come again. In his report, to which I shall return in a moment, Sir Michael Pitt described the fear that existed at the time of the floods. Now there is a different fear: what if it happens again? I do not think we can assume that this was a one-in-150-years flood. We do not know whether it was or not. Heaven forbid, it could happen again next week or next year. In the House we often discuss the problems caused by climate change, but I think we should take account of the fact that the same amount of rain could fall again at any time. We hope that it will not, but we really do not know.
	People are living in fear, and although I have tried to establish contact with as many of them as possible—I have placed advertisements in newspapers and written to people—it is difficult to reach everyone. Despite all the activity going on around them, people feel alone. One thing that worries them is insurance for the future. Many face increased premiums, some cannot obtain insurance cover at all, and some are being told by insurance companies "If you want flood cover, there will be a very large excess on your policy". One lady told me—and I think this is fairly typical—that the insurance company had said there would be a £10,000 excess on her buildings insurance and a further £10,000 excess on insurance for furniture and other items. Effectively, that person has no insurance. If it floods again, it will cost her at least £20,000 out of her own pocket. We may be in a position perhaps to criticise people who were not insured last time, but what now? People cannot get insurance. The Association of British Insurers said:
	"We continue to decline a request for new cover for a property which has recently flooded unless the property has already been reinstated and where we are supplied with details of the flooding, what caused the flood, what the cost of the damage was and—
	crucially—
	"what action has been taken to avoid any future event."
	Surely that is beyond the control of the householder. It is not the Minister's fault either, but I would like to ask him if he has any idea of what can be done in this respect.
	Another problem is that business is down, particularly in the town of Tewkesbury. It has been a bit depressed for a while—more than it ought to be—but businesses are struggling to come to terms with what has happened. There was a tremendous loss of trade at the time, but it has not picked up as we hoped it would. I would welcome any suggestions that the Minister may have, but I want to say publicly that Tewkesbury is open for business. It is working and still open. As I have said, it did not end up like New Orleans sadly ended up. I hope that people will continue to come to Tewkesbury.
	One of the problems is identifying who is responsible for which ditch, which drain and which culvert. Is it the Environment Agency, the Highways Agency, British Waterways, the county council, the borough councils or the repairing owner? It is very difficult. Once an organisation accepts responsibility, it then must put the job right, which, of course, costs money.
	I wrote to the Minister on 15 November specifying projects that needed completion. I shall return to those in a moment, but on the issues of drains, ditches, sewers and culverts, we have had heavy rain in some parts of the country, which has brought the problems to light. I wonder what state the ditches and drains are in throughout the country. We simply do not know. I am pleased that Sir Michael Pitt's report has highlighted that as an important issue.
	We have a problem at Prestbury, where houses where people have lived without flooding for 40 years flooded in June. The culverts were not joined up and a tree fell on another culvert. The tree was listed and the owner did not want it to be felled, so the problems go on. The problem now is that, some months on, the Environment Agency is saying that it wants the whole cost to be reassessed. There will be a further delay in fixing the culverts in an area where 500 homes remain at risk.
	There is a problem with the bridge at Bredon road, which was cut off during the floods, causing the town of Tewkesbury to be isolated. The bridge has been repaired, but at low cost. I do not think that it would withstand future flooding. Planning permission has been sought for a further 105 homes further up the road, close to the bridge. Those houses would connect to the main sewers, which might not have the capacity to cope. What are the planning requirements with regard to drains? Who is responsible for the ongoing maintenance? Again, Sir Michael Pitt's report asks those questions.
	In Uckington, gardens collapsed into the river Chelt and one person at least is still awaiting answers from the Environment Agency about what can be done to rectify matters.

Laurence Robertson: The hon. Gentleman is right, and I would go further as I have before on a number of issues. The Environment Agency, as it is formulated, is not up to the job. It either needs more responsibilities and powers, and perhaps more money, or it deserves to be scrapped. I really do not think that it serves a useful purpose as it stands. I again appeal to the Minister that something be done about it.
	We have also had a problem with maps. The flood risk maps did not correspond to the floods we actually had—and Sir Michael Pitt referred to the fact that flood risk maps for surface water did not exist at all. This begs a question: if the maps do not correspond to the actual flooding we are having, should they be used to determine where houses can be built? I want to return to that, although I realise that I do not have as much time in this debate as I had last year, so I shall have to hurry up a bit.
	I want services to be protected. It is good that Mythe water treatment works and Walham substation are now protected by Hesco bastions, but they are semi-permanent and permanent measures are definitely needed. Alternative networked supplies are also needed.
	On money, if Tewkesbury borough council wanted, for example, to spend a little more on flood relief, would it be allowed to go over the capping limit? I do not know the answer to that, and I wonder whether the Minister might be able to help. I am pleased that the Government have secured about £100 million from the solidarity fund, but I would like to know how that money will be distributed and used.
	Turning to Sir Michael Pitt's interim report, I am meeting him on 23 January and I will raise some of the following issues with him, but it will be useful to run through them briefly now. The report raises a number of good points, particularly with regard to drains, ditches, sewers, surface water and agencies' responsibilities. For example, he says that
	"the automatic right to connect surface water drainage of new developments to the sewerage system should be removed".
	That is a useful suggestion.
	Sir Michael acknowledges, however, that it is an interim report. He says that more information is needed, and in a bid to help in that process I wish to make a couple of comments. Some of the interim suggestions are a little general. There is a lot of talk about strategies, assessments and guidances, and I hope that they can be worked up into more direct proposals for action. I also think that there is too much emphasis on homeowners doing work to protect against floods, which has caused a little offence in Tewkesbury. Sir Michael suggests that instead of being set against the floor, plugs should be mounted higher up on walls. That is fine, but one cannot move cookers right to the ceiling; there are obviously certain limitations on what can be done.
	The Department for Environment, Food and Rural Affairs suggests that it would cost between £3,000 and £10,000 to protect each home. People do not have that sort of money to spend. On that point, I understand that the Environment Agency has just taken away the £20,000 donation it makes to the National Flood Forum, which is unfortunate. That group is a charity; it advises people on flooding—and it suggests steps that Sir Michael's report also suggests.
	There has been a little too much emphasis on what individuals can do. That is not the main point. There is not enough emphasis at present on what the Government's role should be in preventing house building on or near floodplains. Sir Michael says:
	"No new building should be allowed in flood risk areas that is not flood resilient".
	To say that such houses must be resilient rather misses the point. There used to be green fields that soaked up water. If they are built on, that water goes elsewhere and causes a problem. Sir Michael was quoted—I do not know how accurately—in the  Gloucestershire Echo as saying that there is no point in recommending no building in these areas as the Government would not listen. That weakens the recommendation. That is far too weak, and it does not appear to be too impartial or too independent. The point about where houses are built is the one that people make most frequently. People strongly feel that we should not have more houses on floodplains or even in areas close to floodplains.
	To summarise, my recommendations are clear and they are the same as those I made a few months ago. There should be no building on or near floodplains. We need to clear out the ditches and the drains. We need to repair sewers and culverts. We need to create one body that is powerful and that is responsible for all this work and for flood prevention and defences. We need to identify vulnerable people and buildings and to create a list of them, so that they can be helped first should such a situation arise again. We need to protect the water and electricity works and to network the supplies, and we of course need to improve the defences as far as possible.
	As I said, Sir Michael's report is an interim one and I hope that we can move it on to become an even stronger report. I hope, too, that the Government will take account of the recommendations in it and of the recommendations that those of us who have to live in these areas—who have the pleasure of living in these areas, but who have suffered recently—will make.

John Healey: I start by congratulating the hon. Member for Tewkesbury (Mr. Robertson) on securing this debate and on his determination, as he said tonight, to keep this matter on the agenda. He is absolutely right to do so, because although he is right to say that the flood waters have long gone in the areas affected by the summer floods, many of the households, businesses and communities that have experienced problems in trying to get back to normal still have not done so. As Minister responsible for co-ordinating Government support for the recovery efforts, one of my principal tasks is to make sure that we give local councils leading those recovery efforts and providing that support the help and back-up that they need.
	The hon. Gentleman said that he wanted to make sure that the Government are aware of the continuing problems that people face and the continuing pressure that councils are dealing with through this recovery period. I pay tribute to him—he has done that consistently since July, as has the hon. Member for Forest of Dean (Mr. Harper), who has now left the Chamber, and my hon. Friend the Member for Stroud (Mr. Drew). They have been consistent not just in their participation in the tele-conferences that I and my colleague Ministers ran throughout the summer recess, but in their attendance of meetings held by Ministers. As the hon. Member for Tewkesbury said, he also had a similar debate in October. Essentially, such efforts have ensured that Ministers have information first hand, direct from Members of this House, about the pressures that people are under, the challenges that they face and the support that councils and communities are rightly looking for the Government to offer.
	The hon. Gentleman said that in future, we might need to be prepared for events such as those that occurred in the summer happening more often. During that summer, we were certainly faced with severe, prolonged and unprecedented levels of rainfall that in many areas simply overwhelmed the drainage systems, flood defences and rivers. That rainfall resulted in severe damage to many properties. We estimate that during the two episodes of flooding in June and July, some 48,000 homes were flooded. Not just the gardens, outhouses or garages were flooded; there was water in the house in 48,000 properties. Of course, the June flooding was mainly in South Yorkshire and Humberside, although there were pockets of flooding in the hon. Gentleman's own county of Gloucestershire.
	Let me give the House an indication of the scale and severity of that rainfall. On 20 July, when the rainfall occurred that caused the problems in the hon. Gentleman's constituency, Gloucester received in one day one and a half times the average rainfall for the whole of July. Upstream at Worcester on the River Severn and at Evesham on the River Avon, the equivalent of two months' rain fell in just one day. In Gloucestershire, approximately 4,000 homes and more than 500 businesses were flooded. Many other households and businesses were of course affected by the flooding of the Mythe water treatment works, which meant that some 350,000 people in the county went without water for some time. I pay tribute to the heroic efforts of the emergency services and local councils in protecting Walham. As I saw for myself when I paid a visit on 24 July, we came very close, had that sub-station been knocked out, to seeing a power failure not just in Gloucestershire, but potentially in large parts of south Wales as well.
	The hon. Gentleman spoke of the strength of community spirit and the generosity shown in the way that neighbours were looking out for each other—they continue to do so—and I reinforce that point, because that has been my experience. On 24 July, when I first visited Tewkesbury, I went to the town centre and was met by Police Inspector Brian Murnaghan, who was overseeing the distribution of bottled water. Sports centre staff were helping to distribute the water, and people such as the constituent whom the hon. Gentleman nominated for the local heroes reception were making sure that their housebound elderly neighbours got the water that they needed. Inspector Murnaghan was finishing off a 10-hour duty overseeing that operation in Tewkesbury town centre, and in the course of our conversation he told me that his home had also been flooded out.
	The mayor of Tewkesbury, Councillor Phil Awford, gave up a good deal of his time to show me around Tewkesbury. He is a renowned and rightly respected campaigner as part of the National Flood Forum, but he said to me on that day, "Truth be told, nothing could have protected us from the scale of the rainfall that we faced in Gloucestershire at that time."
	My aim as the Minister responsible for the flood recovery is to ensure that we co-ordinate and put in place the central Government effort to support the local recovery efforts. Along with fellow Ministers, I have tried to ensure that despite the fact that the flood waters have gone—the problems have not—constituencies such as those of the hon. Gentleman and my hon. Friend the Member for Stroud are not forgotten. Indeed, 22 ministerial visits have been made to Gloucestershire since the summer, not least those made by the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Gloucester (Mr. Dhanda), who has played a great part in that programme. It is important that Ministers make such visits and it is important that Ministers at the centre of Government understand the challenges that are still being faced.
	I am glad that the funding so far to Gloucestershire stands at about £15 million—there will be more to come. The hon. Gentleman's area, Tewkesbury, has benefited greatly and has made good use of the flood recovery grant that we were able to put in place. We await any Bellwin application that his authority may wish to make. I visited Tewkesbury just before Christmas, on 17 December, when I met the chief executive and other leading figures of the town council. May I tell the hon. Gentleman that what happens in the future and what happens with planning applications was a concern raised by local representatives? I gave an undertaking then, which has been followed up by officials in my Department, that Government office officials and planning experts will set up a meeting in Tewkesbury—they have already written to Major Wilson, the town clerk, to get that under way—so that representatives from the local community and the council can discuss directly the sort of points that he is concerned about for the long term.
	The hon. Gentleman mentioned the first successful application that the UK has made to the European solidarity fund. I had a meeting in Brussels with Commissioner Hubner on 31 October, and she has since persuaded the European Commission to agree to proposals that mean that we should receive additional aid to contribute to the costs of dealing with the flood recovery in Britain. We are working through the terms on which that money can be spent with the Commission, and I hope before long to be able to settle that matter. It will probably be some time before Easter when we finally receive that money—that is the sort of time scale and pace at which the Commission's programme operates; nevertheless, that is an additional resource from the special fund set up to help countries such as our own, which have been hit by serious national events like these.
	The hon. Gentleman rightly raised the issue of those who are still not back in their home. One of the most distressing aspects of the flooding has been the impact on families and households. Based on the work of local authorities in Gloucestershire, we estimate that about 1,250 households are still not fully back in their homes. Around 250 of those are staying in caravan accommodation. When I visited the hon. Gentleman's constituency on 17 December, I met Mrs. Julie Irwin. Her family, including three children, are able to sleep in their house, but are otherwise living in a caravan. The oven in the caravan is too small for the Christmas turkey, which is an example of the stresses, many of which are hidden, on such families, who are still struggling. I pay tribute to Mrs. Irwin for the way in which she has coped, and to her son, who suggested to Gloucestershire county council that children from families who are not back in their home should be entitled to free school meals. The council has now put that suggestion into practice.
	That visit was one of the reasons why I was pleased to be able to announce just before Christmas that I would make available an extra £1 million to the small number of authorities that have a large number of households that are still not back in their own home. We are consulting with local authorities about how to distribute those funds, and I hope to make an announcement shortly. That decision followed an important meeting that I had with the local authorities and the insurers, in which the authorities undertook to improve communications with those households not back in their own home and to assess the needs of those living in caravans to better understand the pressures of the onset of winter. For my part, I undertook to step up the advice available from the Government to deal with homelessness problems, and I have now made the extra money available.
	On the question of the insurers, my hon. Friend the Minister for the Environment was in his place on the Front Bench when the hon. Gentleman made the point about the lady from his constituency who faced prohibitive premiums. We would be interested in the details because we are keen to hold the ABI to the reassurances that it has given that no areas have been blacklisted for insurance, that existing cover has not been withdrawn in any area, and that there is no evidence of policy renewals being refused.
	The hon. Gentleman is right to draw attention to the need to learn lessons. The first report by the Pitt review was important and we have accepted the 15 urgent recommendations. There will be consultation on those and others over the next three months. It is clear that we need to improve Government emergency procedures; to improve surface water management; and to review the role of fire and rescue services during floods. We will do that.
	The local reviews, such as those led by—
	 The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Speaker  adjourned the House without Question put, pursuant to the Standing Order.
	 Adjourned at Twenty-seven minutes to Eleven o'clock